In the last week, the price of Bitcoin took a significant nosedive, recording a 7% loss to trade as low as $59,478. According to data from CoinMarketCap, Bitcoin attempted a rebound following this dip but has since been stuck in consolidation between $60,100 – $62,300.
Commenting on this development, John Bollinger, inventor of the Bollinger Bands, a popular technical momentum indicator, has provided potential insights into Bitcoin’s next movement as investors continue to await the much-expected crypto bull run.
In an X post on June 28, Bollinger predicted the price of Bitcoin will maintain its current range-bound movement. The prominent analyst made this projection based on the absence of a price bound following a two-bar reversal at the lower Bollinger Band.
No bounce after a Two-Bar Reversal at the lower Bollinger Band, more consolidation expected. #Bitcoin https://t.co/vIH2wo4CsJ
— John Bollinger (@bbands) June 28, 2024
For context, the Bollinger Bands consist of three lines (bands) namely a Middle Band which is typically a 20-day moving average of the asset’s price, and an upper and lower band which represent the SMA plus and minus two standard deviations of the price respectively. The Bollinger Bands are primarily used for trend identification and for indicating potential breakouts and breakdowns.
Notably in trading, a two-bar reversal is a candlestick pattern showing a potential change in price direction. When this pattern occurs at the lower Bollinger Band, it often suggests that the asset might experience a bounce or a reversal to the upside due to being oversold.
However, in the current case of Bitcoin in which there is no price gain following this development, it can indicate continued weakness or price indecision which may cause BTC to remain in consolidation.
Generally, such sideways price movements are driven by bearish or uncertain sentiments leading to a lack of buying pressure from investors even at lower prices. In addition, this absence of price bounce also indicates that the current lower Bollinger Band represents a weak support level increasing the risk of a price breakdown.
At the time of writing, the price of Bitcoin continues to trade at $60,629 with a 1.31% decline in the last day. However, the asset’s daily trading volume is up by 15.95% and is currently valued at $24.8 billion.
Notably, Bitcoin lost 11.69% of its value in June as its price dipped below $60,000. However, despite this decline, investors remain resilient in their expectations of a price rally to kick-start the crypto bull season. Notably, a crypto whale recently bought 20,200 BTC at $1.23 billion, showing much confidence in the token’s ability to stage a price rebound and embark on a bullish run.
BTC trading at $60,750 on the 4-hour chart | Source: BTCUSDT chart on Tradingview.com
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