cryptoglobe.com
The price of the flagship cryptocurrency Bitcoin has recently surged to the $67,000 mark and amid its recovery, a popular cryptocurrency analyst has recently suggested that a key technical indicator points to a potential move to between $140,000 and $190,000.
In a post shared on the microblogging platform X (formerly known as Twitter), popular analyst Julien Bittel told his over 70,000 followers that Bitcoin’s Bollinger bands are currently “crazy tight by historical standards,” with only two other months in its history seeing the weekly indicator so compressed, April 2016 and July 2023.
Bittel noted that in both case the price of the flagship cryptocurrency ended up rising significantly over following 12-month periods, suggesting that a similar move could now see BTC “within a range of $140,000 to $190,000.”
#Bitcoin Bollinger Bands are crazy tight by historical standards.
— Julien Bittel, CFA (@BittelJulien) July 19, 2024
Only two other months in history have we seen the weekly Bollinger Bands so compressed: April 2016 and July 2023.
During both of the previous episodes, Bitcoin prices rose significantly over the following twelve… pic.twitter.com/hBb8d73SGc
Bollinger bands are a technical analysis tool that measures the volatility of a market. They consist of three lines: a simple moving average (SMA) of the price, and two bands above and below the SMA that are calculated by adding and subtracting a multiple of the standard deviation of the price.
The standard deviation is a measure of how much the price deviates from the average. Times of escalating volatility are characterized by a pronounced expansion in the gap between the two bands and a corresponding widening of the bandwidth. Conversely, when volatility ebbs, the bands tighten and the width narrows.
A bandwidth that is excessively broad or high may signal the approaching conclusion of the prevailing bullish or bearish trend. Alternatively, a notably low bandwidth might be an indicator of an imminent market swing in one direction or the other, as per the explanation provided by Fidelity.
Featured image via Pixabay.