More

    Why Bitcoin Could Slingshot Back To Lows Before Gaining Momentum

    Bitcoin price is making its best attempt yet to climb back above $40,000 since the big crash in May. Thus far, the phrase “sell in May and go away” has worked like a charm, and it could take longer before buying coins back again is a profitable strategy.
    That’s because the top cryptocurrency is struggling to hold above the middle-Bollinger Band, and if it can’t hold, it could result in another retest of the bottom of the band. Another retest could finally push the price per coin below support, making a clean sweep before a reversal.
    Deja Vu: Why A Historic Move Could Be On The Horizon
    For anyone who was around the crypto market during 2019, it feels like deja vu. At above $10,000, it wasn’t uncommon to see traders claiming the next stop was $100,000 or more. They were wrong, and Bitcoin crashed.
    When it did, and sentiment shifted bearish, the cryptocurrency reversed with the third most profitable day on record. Anyone familiar with the October 2019 “China pump” knows that things can turn around fast, even when they seem at their worst.
    Related Reading | Time To Pay Attention: Bitcoin Indicator Behavior Mimics Historic Rally
    Indicators are primed in the same way and so is sentiment, and the latest rally following a morning star reversal and dragonfly doji serve up plenty of bullish signals.
    Why then, are the Bollinger Bands warning of one more potential collapse – matching the China pump a lot more closely than the current price action.

    Could Bitcoin sweep lows one more time? | Source: BTCUSD on TradingView.com
    Bitcoin Price Could Slingshot Lower Before A Bounce Back To Highs
    The Bollinger Bands created by John Bollinger are a versatile technical analysis tool that measures volatility, highlights support and resistance, and much more. When the bands tighten or squeeze, it is a sign a massive move is coming ahead, and so far the tool is signaling something shocking should soon happen. But when?
    Related Reading | Bitcoin Daily Dragonfly Doji Gives Bulls Hope Of Sharp Reversal
    Not quite yet, if the middle-Bollinger Band – a simple moving average – is lost as support. During the prelude to the historic China pump, the middle-BB was lost not once but twice.

    Indicators also match the last time Bitcoin got so confusing | Source: BTCUSD on TradingView.com
    Bollinger Band Width is at similar lows, but should hang there a while long. BB% could sweep the current low like it did in 2019 before slingshotting back upward.
    Finally, the LMACD is also exhibiting a very similar pattern and if another bearish crossover happens, it could be a massive trap like the last time around. But for now, beware of one more sweep of lows before a reversal.
    Featured image from Deposit Photos, Charts from TradingView.com

    Related articles

    Comments

    LEAVE A REPLY

    Please enter your comment!
    Please enter your name here

    Share article

    Latest articles

    Newsletter

    Subscribe to stay updated.

    bitcoin
    Bitcoin (BTC) $ 41,534.00
    ethereum
    Ethereum (ETH) $ 2,588.87
    tether
    Tether (USDT) $ 0.996859
    binance-coin
    Binance Coin (BNB) $ 339.96
    cardano
    Cardano (ADA) $ 1.36
    xrp
    XRP (XRP) $ 0.759599
    dogecoin
    Dogecoin (DOGE) $ 0.209321
    usd-coin
    USD Coin (USDC) $ 0.998564
    polkadot
    Polkadot (DOT) $ 18.11
    binance-usd
    Binance USD (BUSD) $ 0.998025
    uniswap
    Uniswap (UNI) $ 22.47
    bitcoin-cash
    Bitcoin Cash (BCH) $ 547.20
    chainlink
    Chainlink (LINK) $ 22.63
    litecoin
    Litecoin (LTC) $ 146.64
    solana
    Solana (SOL) $ 35.10
    wrapped-bitcoin
    Wrapped Bitcoin (WBTC) $ 41,585.00
    matic-network
    Polygon (MATIC) $ 1.08
    stellar
    Stellar (XLM) $ 0.288091
    ethereum-classic
    Ethereum Classic (ETC) $ 52.21
    theta-token
    Theta Network (THETA) $ 6.13
    vechain
    VeChain (VET) $ 0.090007
    internet-computer
    Internet Computer (ICP) $ 42.37
    dai
    Dai (DAI) $ 0.999252
    okb
    OKB (OKB) $ 19.67
    filecoin
    Filecoin (FIL) $ 55.34
    compound-usd-coin
    cUSDC (CUSDC) $ 0.022109
    terra-luna
    Terra (LUNA) $ 11.36
    tron
    TRON (TRX) $ 0.065638
    cdai
    cDAI (CDAI) $ 0.021567
    monero
    Monero (XMR) $ 245.35
    aave
    Aave (AAVE) $ 329.38
    eos
    EOS (EOS) $ 4.09
    compound-ether
    cETH (CETH) $ 52.14
    ftx-token
    FTX Token (FTT) $ 35.18
    cosmos
    Cosmos (ATOM) $ 13.02
    amp-token
    Amp (AMP) $ 0.071131
    pancakeswap-token
    PancakeSwap (CAKE) $ 16.54
    the-graph
    The Graph (GRT) $ 0.706969
    crypto-com-chain
    Crypto.com Coin (CRO) $ 0.129092
    shiba-inu
    Shiba Inu (SHIB) $ 0.000006
    neo
    NEO (NEO) $ 43.77
    leo-token
    LEO Token (LEO) $ 3.03
    algorand
    Algorand (ALGO) $ 0.853852
    maker
    Maker (MKR) $ 3,006.08
    bitcoin-sv
    Bitcoin SV (BSV) $ 143.42
    klay-token
    Klaytn (KLAY) $ 1.05
    tezos
    Tezos (XTZ) $ 3.11
    celsius-degree-token
    Celsius Network (CEL) $ 6.15
    iota
    IOTA (MIOTA) $ 0.900075
    avalanche-2
    Avalanche (AVAX) $ 13.63