Bitcoin price is struggling to rise above $ 40,000 after the great crash in May. So far, the phrase “sell in May – and go” has worked great and it may take longer before buying the coins back, which will be a profitable strategy.
This is because the tallest cryptocurrency is struggling to hold above the middle Bollinger Band, and if it cannot hold, it could trigger a retest of the lower end of the band. Another new test could finally push the price of the coin below support, smoothing out the reversal before the reversal.
Have already seen: why a historical movement may be on the horizon
To anyone who has been in the cryptocurrency market in 2019, this sounds like déjà vu. Above $ 10,000, it is not uncommon for traders to claim their next stop will be $ 100,000 or more. They were wrong and Bitcoin crashed.
When this happened and sentiment turned bearish, the cryptocurrency turned around and became the third most profitable day on record. Anyone familiar with the October 2019 “Chinese fan” knows that things can change quickly, even when they are looking for the worst.
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The indicators are tuned in the same way as sentiment and the recent rally after the morning star reversal and the dragonfly doji is giving a lot of bullish signals.
Why then do Bollinger bands warn of another potential collapse – there is much more Chinese pumping than the current price movement.
Could Bitcoin sweep lows one more time? | Source: BTCUSD on TradingView.com
Bitcoin Price May Fall Before Bouncing To High
Bollinger Bands, created by John Bollinger, are a versatile technical analysis tool that measures volatility, highlights support and resistance levels, and more. When the bands are tightening or tightening, it is a sign that a massive step is brewing, and while the instrument is signaling that something shocking is about to happen. But when?
Related reading | Bitcoin Daily Dragonfly Doji gives bulls hope for sharp reversal
Not yet, if the Bollinger Average – Simple Moving Average – is lost as support. During the prelude to China’s historic pomp, the average BB was lost not once, but twice.
Indicators also match the last time Bitcoin got so confusing | Source: BTCUSD on TradingView.com
The Bollinger Bands are at similar lows but are expected to remain at that level for some time. BB% could displace current lows like in 2019 before rallying to sling.
Finally, the LMACD also shows a very similar pattern, and if another bearish crossover occurs, it could be a huge trap like last time. But for now, beware of another downside jump before the reversal.
Featured image from Deposit Photos, Charts from TradingView.com