Hopium Den: Bollinger bands might be signalling an ‘inexorable breakout’ for Bitcoin
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According to one reasonably popular Crypto Twittering trader, the Bollinger Bands – a prominent technical analysis indicator – could be showing a big move up for Bitcoin.
Time to bust out the champagne, then? Nopium. Not yet, anyway – and that’s because technical analysis is only gleaned from the resulting usage of an array of tools that can track the past performance of assets in an attempt to predict where they might move next.
Still, it’s something of a science that good traders are able to interpret fairly meaningfully, reasonably often.
Bollinger Bands are named after American financial analyst John Bollinger, who developed the system in the 1980s.
According to Investopedia, the “bands” are “defined by a set of trendlines. They are plotted as two standard deviations, both positively and negatively, away from a simple moving average (SMA) of [an asset’s] price and can be adjusted to user preferences”.
The trader/analyst “Titan of Crypto” (35.4k followers) has been watching the bands set on a monthly timeframe and spies potential for the sort of breakout opportunity that only took place once in each of the past two Bitcoin four-year cycles.
#Bitcoin Inexorable Breakout 💥🚀#BTC is about to break its monthly Bollinger Bands base line 🔴. And when that happens 1st target 🎯 will follow inexorably. That would bring #Bitcoin to a solid $63,500. pic.twitter.com/jMojWaS3eL
— Titan of Crypto (@Washigorira) May 5, 2023
The two previous BTC price breakouts, in 2016 and 2019, show the asset busting up over the Simple Moving Average (SMA) median line into the top half of the band, which preceded a strong move up to the “first target” levels in both instances.
That first target, according to “Titan” is a lofty US$63,500 – roughly $5,500 below Bitcoin’s all-time high set in November 2021. Hopium pipe, indeed.
Just a caveat, we of course can’t be sure just how much crypto analysts use these tools to feed existing confirmation bias, as a look at further tweets from that account shows a few other flashing, rare, bullish indicators besides.
That includes something called “Williams Alligator“, which, IF Bitcoin is able to keep moving a little further up and to the right, will also be corresponding pretty neatly with those Bollinger Bands breakout areas. Judging by that set of analysis, however, the breakout target is lower, at US$50,400.
That’s still a lot higher for 2023 BTC predictions than we’ve been seeing from most other crypto chartists.
Once Williams Alligator 🐊 turns bullish after a long period of bear market, the 78.6% Fibonacci retracement level starts to act like a magnet on #BTC.
Fasten your seatbelt as 78.6% target is at $50,400. 🎯✈️ pic.twitter.com/YO9W2i1Lda
— Titan of Crypto (@Washigorira) May 7, 2023