bitcoin bollinger bands

Bitcoin Monthly Tags Lower Bollinger Band, the creator of the tool hints at the bottom

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Bitcoin price action on monthly time frames has taken a historic step to touch the lower Bollinger Band – a popular technical indicator and measure of volatility.

While warning that there is no sign of a bottom yet, the tool’s creator says price action is a “logical” level for such a bottom.

Unprecedented Bitcoin Price Action Taps Monthly Bollinger Band For First Time In History

The expectations for the Bitcoin price in 2022 were closer to $100,000 per coin and above. Still, today’s top cryptocurrency is trading close to its former 2017 all-time high of $20,000.

But unprecedented macro conditions have led to unprecedented price action in Bitcoin and other cryptocurrencies. Never in the past has the best cryptocurrency by market capitalization retested its former all-time high in this way.

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And never has Bitcoin price on monthly time frames ever reached the lower Bollinger Band. But that’s exactly what happened last month as the crypto market contagion spread and sent asset prices down significantly.

BTCUSD monthly touches down on the lower Bollinger Band | Source: BTCUSD on TradingView.com

However, touching the lower Bollinger Band could be a logical place for a bottom, according to the maker of the tool.

Time to Watch: John Bollinger Points to Logical Level for Potential Bottom

The Bollinger Bands are a technical analysis tool that can help measure and predict volatility, or find areas of potential resistance and support. It was created in the 1980s by John Bollinger, who is a frequent Bitcoin speculator today. It is based on a simple 20-period moving average and dynamic upper and lower bands, each set to two standard deviations.

Mr Bollinger pointed to the touch of the lower Bollinger Band in a new tweet, where he suggests the area would be a “logical” level down. However, Bollinger warned that there are still no signs of such a low.

In the past, Bollinger was able to declare the April 2021 peak by seeing a “three pushes to a high” bearish reversal pattern with striking accuracy. The analyst says his tool later confirmed what he said was an “M-type” double top.

Bollinger also shared in his chart a look at the supplemental indicator, B%, which has also hit historic lows. The monthly Bollinger bandwidth can be used to measure volatility and still has room to decline compared to previous cycles.

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Does Bitcoin price also have more room to fall? Or will a bottom form in this “logical” zone as the maker of the tool draws attention to? Anyway, it seems “time to pay attention”.

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Featured image from iStockPhoto, Charts from TradingView.com