Yann Allemann, co-founder of Glassnode, has cautioned Bitcoin investors and traders about the notable movement of the Bollinger Bands Width (BBW) for Bitcoin. The BBW has shrunk to a mere 0.20, a historical precursor to significant price fluctuations in Bitcoin.
The power of Bollinger Bands
For those new to the term, Bollinger Bands serve as a volatility indicator for asset prices. Comprising of three lines – the middle being a simple moving average (SMA) and the other two lines marking standard deviations away from the SMA – these bands expand and contract based on market volatility.
A narrowing of the bands, as noted by Allemann, often precedes a sharp price movement, which can be either up or down.
In this case, with the Bollinger Bands 50 and the Moving Average (MA) 50 positioned below the candlesticks, Allemann sees this as a bullish sign, suggesting that Bitcoin's price is poised for an upward trajectory. As Allemann cautions, "Volatility is brewing, and it's about to make its grand entrance."
Bitcoin’s make-it-or-break-it level
The cryptocurrency community's gaze is steadily fixed on the $28,000 price mark, recognized as a pivotal level for Bitcoin. This figure isn't just a random number. Yann Allemann, in a separate post, underscored its integral role in deciphering market dynamics and gauging investor sentiment. A
As reported by U.Today, Bitcoin's recent rally, which was triggered by an erroneous report about the U.S. Securities and Exchange Commission's approval of BlackRock's iShares application for a Bitcoin ETF, saw the flagship cryptocurrency soar over 10%.
Despite the controversy, Bitcoin has managed to maintain its position above the crucial $28,000 level. As of the latest update, Bitcoin is trading at $28,366, according to CoinGecko data.