Bollinger Bands Creator on Bitcoin Price: 'Time to Be Cautious or Short'

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Wed, 06/03/2020 - 05:50
Alex Dovbnya
Bitcoin's recent rally to $10,400 was simply a ‘head fake’ meant to trap the bulls, according to trading legend John Bollinger
Cover image via www.youtube.com
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John Bollinger, the creator of the Bollinger Bands indicator, has just taken to Twitter to share a gloomy warning about Bitcoin’s current price action.  

image by @bbands

Bollinger believes that it’s time to be ‘cautious or short’ for traders as Bitcoin is trading just below the $9,500 level.    

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Bitcoin traps the bulls

As reported by U.Today, the flagship cryptocurrency started this summer with a bang by surging to $10,429 on June 1. RT host Max Keiser rushed to predict that BTC could soon reclaim the $15,000 level as Bitcoiners started to spam ‘never below $10,000 tweets.’

image by tradingview.com

On June 2, Bitcoin erased all of its overnight gains in just a couple of minutes and continued to plunge to as low as $8,600 on the BitMEX exchange. 

The upside move that was prematurely celebrated by the bulls was described by Bollinger as ‘head fake’ at the upper band.

The trading term, which originally came from basketball, describes a setup when a certain asset makes a sharp move in a certain direction but then completely reverses it and continues to move in the opposite one.

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Bollinger’s prescient calls

Back in October 2019, Bollinger accurately called a ‘head fake’ move to the downside, which trapped the bears. 

On Oct. 23, the BTC price dropped to $7,300, which was followed by a major rally to $10,400 just two days later on the news about China getting behind the blockchain technology.

At the end of April, he also tweeted that BTC was ‘moving into squeeze territory’ before the coin’s price jumped 40 percent in a little over a week.  

Still, even the trading guru with nearly five decades of experience was caught off guard by the violent sell-off that happened on March 12.

About the author

Alex Dovbnya (aka AlexMorris) is a cryptocurrency expert, trader and journalist with extensive experience of covering everything related to the burgeoning industry — from price analysis to Blockchain disruption. Alex authored more than 1,000 stories for U.Today, CryptoComes and other fintech media outlets. He’s particularly interested in regulatory trends around the globe that are shaping the future of digital assets, can be contacted at alex.dovbnya@u.today.

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