Since the massive drop in May, Bitcoin’s price has been attempting to rise back above $40,000 in the best way possible. The saying “sell in May and go away” has worked wonders so far, but it may be a while before buying coins back is a viable approach.
That’s because the top cryptocurrency is struggling to stay above the middle-Bollinger Band, and if it can’t, another retest of the band’s bottom is possible. Another retest might bring the price per coin below support, completing a clean sweep ahead of a reversal.
Why Is It Possible That A Historic Move Is On The Horizon?
Anyone who was involved in the cryptocurrency market in 2019 may have a sense of déjà vu. It wasn’t uncommon to hear traders state that the next stop was $100,000 or more once the price had risen past $10,000. They were mistaken, and Bitcoin plummeted.
When it did, and bearish sentiment altered, the Bitcoin reversed course and had its third most lucrative day ever. Anyone who remembers the October 2019 “China pump” knows that things may change quickly, even when they appear to be at their worst.
The last rise following a morning star reversal and dragonfly doji serves up plenty of bullish indications, and indicators and mood are primed in the same way.
The last rise following a morning star reversal and dragonfly doji serves up plenty of bullish indications, and indicators and mood are primed in the same way.
Bitcoin Price Could Slingshot Lower Before A Bounce Back To Highs
John Bollinger’s Bollinger Bands are an useful technical analysis tool that may be used to gauge volatility, indicate support and resistance, and more. When the bands tighten or squeeze, it’s a sign that something big is about to happen, and thus far, the tool is indicating that something big is about to happen. But when is it going to happen?
If the middle-Bollinger Band — a simple moving average – is lost as support, not quite yet. The middle-BB was lost twice during the build-up to the infamous China pump.
Bollinger Band Width is also at new lows, but it should stay there for a while. BB percent might sweep through the present bottom, as it did in 2019, before slingshotting higher.
Finally, the LMACD is showing a very similar pattern, and another bearish crossover might be a major trap, as it was the last time. However, before a turnaround, be wary of one more sweep of lows.
