Bitcoin Is Attempting A Double Bottom According To The Creator Of Bollinger Bands!

As bitcoin hovers around $82,000, a burning question lingers among investors: has the king of cryptos finally found its floor? John Bollinger, a legend in technical analysis and creator of the eponymous Bands, brings a glimmer of hope. According to him, technical signals suggest a rebound scenario. But caution: behind this enticing perspective lie traps to decipher.

Bollinger Bands and %b: The W that Intrigues

On the weekly charts of BTC, a familiar silhouette appears: a double bottom in the shape of a W. For Bollinger, this setup is a historical marker of bullish reversal. The %b indicator, measuring the price’s position relative to the Bands, plays a key role here. When its value dips below zero before rising again, then retesting this level without breaking it, the W mechanics come into play.

A scenario awaiting confirmation. Currently, bitcoin brushes against the lower band, but the central moving average (20 periods) holds firm. “The W is there, but it lacks validation,” Bollinger specifies.

In other words, as long as the price does not surpass the median SMA – located around $85,000 – doubts persist. Buyers remain on the lookout, scrutinizing every movement.

The weight of correlations. In the shadows, another index disturbs the waters: synchronization with the stock markets. The S&P 500, like bitcoin, hovers near its oversold levels.

Jurrien Timmer (Fidelity) notes that the flagship index grazed two standard deviations below its trend, a rare signal but not yet extreme. For BTC, this symbiosis indicates an increased dependence on the ups and downs of Wall Street.

Nasdaq -10%: The Trap to Avoid for Bitcoin

If the Bollinger Bands outline a possible reversal, the macroeconomic context could ruin everything.

Timothy Peterson, a specialized economist, warns: “Bitcoin anticipated the Nasdaq’s decline. But to bounce back, it must wait for the US tech stocks to hit bottom.” A scenario that would imply an additional 10% drop for the index, according to his models.

$70,000: The psychological threshold? Analysts converge on this level, a mix of technical support and market psychology.

Timothy Peterson reminds us that at this stage, historical probabilities give a 95% chance that bitcoin stabilizes its fall. But beware: this threshold also acts as a liquidity magnet, attracting stop-loss orders and amplifying volatility.

Peterson highlights a lesser-known mechanism: bitcoin, perceived as the riskiest asset, reacts after equity indices. In clear terms, the Nasdaq must first show signs of recovery for capital to flow into cryptos. A logic that places investors in a strategic wait, between caution and opportunism.

The classic floor mentioned by Bollinger offers a glimmer of hope, but external variables complicate the equation. Bitcoin navigates between its own technical indicators and the turmoil of traditional markets. However, some believe it will be the big winner of the trade war.