Be Short After $10.3K Bitcoin Price ‘Head Fake,’ Veteran Trader Warns

Bitcoin (BTC) hitting highs of $10,300 this week isn’t a breakout and traders ought to brace for losses, famend analyst John Bollinger has warned.

In a tweet on June 2, the Bollinger Bands indicator creator mentioned that the biggest cryptocurrency’s transient journey to three-month highs was an anomaly.

Bollinger to merchants: Be cautious or brief

In accordance with charts exhibiting Bollinger band conduct for BTC/USD this week, the spike above $10,300 took the pair into territory that usually dictates an upcoming bull run.

Bollinger bands use two customary deviations to plot a boundary above and beneath a easy shifting common value. Usually, that is the 20-day shifting common.

When an asset value breaks out of the house between the 2 bands, the occasion means that volatility up or down is incoming. This conduct tends to be preceded by a narrowing of the band contours.

Bitcoin had caught rigidly to the vary between the 2 bands in Might, indicating decrease volatility. For Bollinger himself, there was no motive to heed the trace that this week’s breakout was real. 

He tweeted:

“The is a Head Faux on the higher Bollinger Band for $btcusd, time to be cautious or brief.”

BTC/USD chart exhibiting latest “head pretend.” Supply: TradingView

Bitcoin’s personal riot?

The indicator has beforehand proven effectivity in monitoring Bitcoin bull and bear cycles, with the beginning of 2020 proving to be no exception. December noticed a narrowing of the bands, adopted by sustained upside as this 12 months started. 

Bollinger’s warning comes as Bitcoin appeared to achieve from unrest in the USA and a drop within the worth of the greenback. As Cointelegraph reported, the panic additionally fueled gold, whereas any main positive aspects for Bitcoin may relaxation on how occasions proceed to unfold. 

Elementary power is slowly recovering from weak spot final month, with miner participation set to proceed bettering after a second destructive issue adjustment in two days’ time.

About Tom Greenly

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