Bitcoin price this morning broke through a short-term downtrend line making up the top of a symmetrical triangle pattern. The currently unconfirmed breakout also caused the “first lift” in the Bollinger Band squeeze resulting from dwindling volatility.
This lift is normally a sign of the Bollinger Bands expanding and an explosive move beginning. However, the technical indicator’s creator and financial analyst John Bollinger, is warning of a potential “head fake” in BTCUSD. The last time the analyst made such a call, a historic, record-setting 40% pump followed.
Lift Begins In Bollinger Band Squeeze As Bitcoin Breaks Out of Symmetrical Triangle
This morning, Bitcoin price broke up from a symmetrical triangle formation keeping the asset locked in a tightening range for several months.
The initial impulse kicked off with a $200 move, causing the first “lift’ in the Bollinger Band “squeeze,” according to the technical indicator’s creator, John Bollinger.
The Bollinger Bands consist of a moving average and two standard deviations, acting as the upper and lower bands. Price passing through the middle-line can act as a buy or sell signal.
The outer bands themselves also can provide certain clues about price action. For example, 90% of price action takes place within the bands, so a close outside the bands often leads to a reversal.
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These bands also widen and contract, depending on an asset’s volatility. When the bands contract, its called a “squeeze.” When the squeeze finally ends, like a coiled-up snake ready for attack, an explosive move happens.
Today’s move in BTCUSD not only pushed the cryptocurrency through the middle moving average, but it also touched the top band, causing the lift. The lift is the first sign that the squeeze is ending, and price action is ready to expand and become volatile once again.
However, it is not