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- A classic measure suggests that Bitcoin
may see a new upward volatility as it revisits significant levels of price strength. - Following its September highs, Bitcoin is now testing resistance levels not seen since mid-August. For Bollinger, the signs from the largest cryptocurrency are promising.
- Despite the strength seen this week, caution is advised due to various trend lines that previously acted as support now remaining above the spot price.
John Bollinger, the creator of the significant indicator Bollinger Bands, shared his thoughts on how Bitcoin might move soon.
John Bollinger Shared His Bitcoin Prediction
A classic measure suggests that Bitcoin may see a new upward volatility as it revisits significant levels of price strength. John Bollinger, the creator of the Bollinger Bands volatility indicator, said in a tweet on September 18th that Bitcoin is ready for an exit decision.
Following its previous-day highs in September, Bitcoin is now testing resistance levels not seen since mid-August. For Bollinger, the signs from the largest cryptocurrency are promising. Bollinger Bands use a simple moving average around standard deviation to determine potential price ranges and volatility.
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Currently, BTC/USD is forming daily candles that touch the upper band. When this happens, it may indicate a return to the middle band in the near future or, conversely, a sign of upward volatility.
The recent tight Bollinger Bands on Bitcoin are now adding weight to the possibility of this scenario playing out. Bollinger commented alongside a chart, saying, “And there is the first tag of the upper Bollinger Band after a new set of control bars was created at the lower band,” and added:
“Now the question is can we walk the upper band? Too early to answer yet.”
Bollinger characterizes the current mood among experienced Bitcoin traders and analysts on shorter timeframes.
Bitcoin investors should be cautious
Despite the strength seen this week, caution is advised due to various trend lines that previously acted as support now remaining above the spot price. Material Indicators, a source of on-chain monitoring, advised X subscribers to question the momentum of the bulls. Material Indicators stated:
“We are currently at technical resistance above key moving averages and have support at the lower lows. Likely, we’ll consolidate within the range, and if we’re lucky, we’ll see legitimate tests of R/S levels that will give us some clarity on where BTC may go by the end of this week.”
Material Indicators brought up the issue in reference to the upcoming decision by the United States Federal Reserve on interest rates, which could generate sudden volatility and unreliable short-term trading signals.
