According to crypto trader Ali, Bitcoin is gearing up for heightened volatility soon based on technical indicators on the 4-hour chart.
In a recent tweet, Ali pointed out that Bitcoin’s 4-hour Bollinger Bands have entered a squeeze. This precedes periods of accelerated price movement once the squeeze resolves.
The trader suggests watching for a 4-hour candle close above $27,000 or below $26,690 to signal the likely direction of the impending volatility spike.
A break upward could provide the momentum needed to retest the pivotal $30,000 resistance area. On the other hand, a close below $26,690 risks opening the door to revisiting the critical support zone around $24,000-$25,000.
The tightening Bollinger Bands indicate Bitcoin’s multi-week period of listless consolidation is likely nearing its end. The compressed price channel presages a coming burst of volatility.
While the breakout direction remains uncertain, Ali’s analysis offers levels for traders to watch that may determine if bulls or bears gain the upper hand once volatility expands again.
After extended periods of restricted price action, volatility squeezes act as coiled springs. The pending Bollinger Band breakout could set the stage for Bitcoin’s next major trend phase. According to CoinMarketCap data, Bitcoin is trading close to $28,000 at press time.
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