John Bollinger, known for his expertise in market analysis, recently did just that shared his insights into Bitcoin’s current market trajectory, noting that the leading cryptocurrency is showing “signs of strength.” This observation comes as Bitcoin consistently sets new highs amid its ongoing bull run.
The asset has been on the rise, rising above $44,000, representing a 4.5% increase in the last 24 hours. It now appears to be aiming for the next resistance level.
Bitcoin is showing signs of strength
John Bollinger, the creator of the famous Bollinger Bands, a popular technical analysis tool, has applied his methodology to measure Bitcoin’s market movement. Bollinger Bands are typically used to measure the volatility of a financial instrument.
They consist of a center band, a simple moving average, flanked by two standard deviation lines. These bands adapt to market conditions, expanding during volatile periods and shrinking during calmer times.
Bollinger’s recent analysis shows that Bitcoin is trading outside its daily and weekly Bollinger Bands. This is especially notable as it indicates a strong continuation of the current bullish trend, without any signs of divergence.
On November 21, a two-bar reversal pattern was noted in the middle Bollinger Band, further amplifying the strength of Bitcoin’s price action.
The air is getting a little thin here, but all we see so far are signs of strength. We are outside of both the daily and weekly BBs with no differences. The final controlling formation was the 2-bar reversal on the center BB, completed on November 21. $BTCUSDhttps://t.co/B4ZU3vpTvV
— John Bollinger (@bbands) December 5, 2023
Bitcoin’s Price Action: Interpreting the Signals
Bitcoin’s bullish momentum continues unabated, rising nearly 5% in the past 24 hours, crossing the $44,000 threshold. Interestingly, the cryptocurrency shows no signs of slowing down or immediate retreat.
However, broader-scale technical analysis suggests that Bitcoin could be approaching a significant retracement zone. Within the one-week time frame, there is an order block between the $48,000 and $50,000 regions.
An order block is essentially an area where significant buying or selling has occurred in the past, leading to significant price movement. When price revisits these blocks, they often act as key levels for potential reversals or continuation of the trend.
Should Bitcoin climb to this region, a retracement could be on the cards. However, voiding this order block and continuing the rally could pave the way for a reversal, possibly when the break block is reached around $60,000.
A breaker block is a specific price zone in which the market has previously shown a substantial reversal, breaking through a level of resistance or support. These blocks are often seen as potential areas where price can experience significant movements or change direction. If Bitcoin takes advantage of this breaker block, it could indicate another pivotal moment in its price trajectory.
Featured image from Unsplash, chart from TradingView