The price of Bitcoin has been trading somewhat down for the past week. However, Bitcoin might soon be in for a more dramatic price shift. That is at least according to one cryptic hint by John Bollinger, the founder of the well-known Bollinger Bands indicator.
Will Bitcoin rally or sink?
Specifically, the founder of the Bollinger Bands technical indicator, John Bollinger, recently sent out a tweet seemingly warning of an impending Bitcoin price crash. On December 13th, he said that investors should pay close attention to the short-term performance of the premier crypto.
“Most cryptocurrencies are at or near Bollinger Band Squeeze levels. Time to pay attention.”
This comes at a time when Bitcoin is lacking any distinct bullish indicators. Although the premier cryptocurrency trades above the psychologically significant $7,000 line, it has seen losses during the past week.
Moreover, the Bollinger Bands is a highly respected technical analysis indicator. Put simply, the measure uses three central lines in order to plot the dynamic resistance, the dynamic support, and the moving average of an investment asset.
Furthermore, the Bollinger Bands subsequently widen when volatility increases and contract when it decreases. As such, it is a highly valuable tool for day and short-term traders – who put a lot of emphasis on moving averages.
Generally, the Bollinger Bands can many times predict a Bitcoin price breakout – although not always. This is generally seen when the upper and lower bands tighten and ”squeeze” the price performance line.
A Bitcoin price breakout may be imminent
With that said, however, a Bitcoin price breakout could happen in either direction. This is likely what Bollinger’s tweet is alluding to – a breakout of the current Bitcoin price levels. Nevertheless, it is hard – if not impossible – to predict in which way the price of Bitcoin is going to move.
Just during the past year, similar patterns were seen in both September and October. However, in September the price sank by roughly $3,000 – while October saw the price jump by around $3,000.
Some analysts are now hinting that the price may be in a bearish macro trend, and may therefore drop. The last time Bitcoin saw similar price circumstances was in July of 2018, when the ”crypto winter” brought the price down to $3,300 from $8,500.
This was a roughly 60% drop. If Bitcoin’s price were to drop by a similar percentage, this would land the current Bitcoin price around a $2,840 price point. As such, it will be interesting to watch Bitcoin’s performance in the coming days and weeks.
Rasmus Pihl is a writer for Toshi Times by day and an avid follower of the blockchain industry by night. Rasmus holds a Bachelor’s Degree in Marketing from the Gothenburg School of Business, Economics, and Law and runs a Swedish marketing consulting firm. Moreover, when he isn’t writing for Toshi Times, traveling, working or changing the world in some other capacity, Rasmus is more than likely caught up in postgraduate studies.