Financial Analyst Predicts Imminent Bitcoin Price Consolidation Amid Rising Momentum

18

Crackling through the wires of the cryptosphere comes a word of caution from esteemed financial analyst, John Bollinger. In hushed tones, Bollinger shared his observations about the meteoric rise of Bitcoin’s price, which rapidly escalated from just below $66,000 to just shy of $72,000 in the early days of the preceding week. Even though his illustration pointed to the likelihood of an imminent consolidation or pullback, Bollinger, the architect of the popularly employed Bollinger Bands indicator, was quick to reassure that he was not negative about long-term prospects.

Bollinger’s scepticism zeroes in on the BTC/USD daily chart. A central apprehension of his is what he terms a “two-bar reversal” pattern that’s visible right on the upper Bollinger Band. This pattern is akin to a flashing red light, indicating a probable shift in price direction. It comes to life when Bitcoin’s price first overshadows the upper Bollinger Band, but then recoils, cloaking itself within the band during the subsequent trading period. Such erratic manoeuvres subtly imply that the thrust of Bitcoin’s upward momentum could be wavering.

Follow us on Google News! ✔️


The Bollinger Bands are the lifeblood of the chart, comprising three main lines: the upper band, the lower band and the equilibrium forming middle band (20-day simple moving average). The bands undergo periods of expansion and contraction in response to price volatility. When Bitcoin’s price towered at approximately $71,977 on Tuesday, it momentarily breached the borders of the upper Bollinger Band, before retracting within its confines, thus giving life to the two-bar reversal pattern.

Digging deeper into the chart reveals the existence of the 20-day moving average or middle Bollinger Band which currently is reclining at around $64,564, providing potential support in the event of a price dip. Historical breadcrumbs found on the chart point to a strong resistance band, lurking near the recent highs of around $71,500. By the same token, potentials for support appear to focus around the $64,500 mark, where the middle Bollinger Band is located, and further down to $58,300, mirroring the lower band.

The Relative Strength Index (RSI), a reliable gauge of Bitcoin’s market momentum, stands at a modest 63, a number that does not veer into the overbought arena. Bolstered by this discovery, Bollinger made it crystal clear that while he is not foreseeing a severe slump, the observed patterns call for caution among short-term traders. He recommends keeping a vigilant eye for periods of consolidation where the price stabilizes, or a pullback where it recoils from recent highs.

Not everyone agrees with Bollinger’s cautionary stance. A contrasting bullish sentiment is echoed by none other than renowned crypto analyst Josh Olszewicz. Drawing upon the Ichimoku Cloud indicator on the daily chart, Olszewicz highlighted a compelling pattern labeled as the “Bullish TK Cross with Price Above Cloud”. This configuration, particularly relevant within the technical analysis circles, indicates an uptrend, suggesting that buying momentum is on the rise and indicative of a possible bullish phase.

What bolsters this bullish signal’s significance is the observation that Bitcoin’s price floats above the “Cloud” or ‘Kumo’, an area viewed as a future support or resistance territory. If the price resides above the cloud, it’s usually a reflection of a bullish trend, suggesting that Bitcoin is navigating through a robust upward current, very likely to persist.

As these contrasting views swirl around the crypto market, at the time of reporting, Bitcoin was trading at $69,846. Amidst the echoes of caution and speculation, the cryptocurrency market continues its dynamic dance, the path of Bitcoin waiting to be etched by the invisible hands of market dynamics.