Bitcoin (BTC) may experience a surge in volatility, according to John Bollinger, creator of the Bollinger Bands volatility indicator. In a recent tweet on September 18, Bollinger suggested that Bitcoin is poised for a breakout decision.
Bitcoin has been testing resistance levels since mid-August, even reaching new highs in September. For Bollinger, these indicators are promising. Bollinger Bands uses the standard deviation around a simple moving average to determine potential price ranges and volatility.
Currently, BTC/USD is forming daily candles that touch the upper band of the Bollinger Bands. This can signal either a reversal back to the center band or an increase in upside volatility. The recent narrow Bollinger Bands on Bitcoin further support the possibility of the latter scenario.
Bollinger emphasized that Bitcoin’s ability to “walk up” the upper band of the Bollinger Bands remains uncertain. However, the first tag of the upper band after a new set of controlling bars was established at the lower band is a positive sign.
Bollinger’s analysis is consistent with a previous report by Cointelegraph in July, which highlighted the narrowing of the bands as an event that preceded a drop in Bitcoin’s price.
Despite the recent strength of Bitcoin, caution still prevails among seasoned traders and analysts. Various trendlines that previously acted as support are still above the current spot price. On-chain monitoring resource Material Indicators suggested that bulls’ momentum should be questioned.
Technical resistance at the Key Moving Averages and support at the LL remain significant factors to consider. There is a possibility of revisiting the range and conducting legitimate tests of the Resistance/Support levels, providing clarity on Bitcoin’s future trajectory before the end of the week.
Material Indicators also referenced the upcoming decision on interest rates by the United States Federal Reserve, stating that it could lead to snap volatility and unreliable short-term trading signals.
It’s important to note that this article does not provide investment advice. Every investment decision involves risk, and readers should conduct their own research before making any decisions.