Famous financial expert John Bollinger Bands Inventor has lately warned that Bitcoin could experience a decline. Bollinger, the inventor of the popular Bollinger Bands indicator, noted specific characteristics in the Bitcoin price chart that indicate a consolidation or pullback could be imminent after the price of BTC surged from $66,000 to nearly $72,000 earlier in the week. However, he clarified that his outlook for the longer term was not pessimistic.
Bearish Argument By John Bollinger
The daily Bitcoin/USD chart is the primary focus of Bollinger’s analysis. A “two-bar reversal” pattern near the upper Bollinger Band is his primary area of concern. In the following trading period, Bitcoin’s price will close within the upper Bollinger Band, forming a pattern that usually suggests a possible reversal in price direction. These changes can signify that the rising momentum is starting to fade.
On the chart, you can see the Bollinger Bands. The bottom band is the lower Bollinger Band; the middle band is the upper Bollinger Band (20-day simple moving average). The upper and lower bands are spaced two standard deviations apart from the middle band, expanding and contracting in response to price fluctuation. On Tuesday, the price of Bitcoin reached a high of around $71,977, briefly breaking out above the upper Bollinger Bands Inventor and then retracing to form the reversal pattern that has been mentioned.
If the price were to drop, more research reveals that the 20-day moving average—the middle Bollinger Band—could provide support at its current level of approximately $64,564. Based on the chart’s historical data, there is significant resistance near the current highs around $71,500, with support levels around $64,500 (where the middle Bollinger Bands Inventor is located) and even farther down at $58,300 (where the lower band also coincides). When the Bollinger Bands widen, market volatility intensifies, especially when prices test resistance levels. At its present level of 63, the Relative Strength Index (RSI) is not yet in the overbought region.
Bollinger has made it plain in his commentary that short-term traders should exercise care due to the observed technical pattern, even though the setup is not inherently bearish. He says to watch for a consolidation period or a downturn when the price drops from its recent highs. I find a two-bar reversal at BTCUSD’s upper Bollinger Band unappealing. Points to a possible reversal or consolidation. Although Bollinger expressed some short-term anxiety, he did not express bearishness.
Bullish Argument
However, well-known crypto expert Josh Olszewicz (@CarpeNoctom) offered. A contrasting perspective on Bitcoin’s optimistic prognosis, highlighting the daily chart’s Ichimoku Cloud indicator. A “Bullish TK Cross with Price Above Cloud” was the feature he singled out on the daily Bitcoin chart. Those who use the Ichimoku Kinko Hyo indicator—a powerful tool that reveals market momentum. Trend direction, and support and resistance levels—will find this pattern relevant to their technical research. When the short-term Tenkan-sen line (moving average) crosses above the medium-term Kijun-sen line (moving average), Olszewicz says it’s a “Bullish TK Cross” that could mean an uptrend is on the horizon.
This crossover usually indicates that purchasing pressure is building and may mark the beginning of a bullish trend. Bitcoin’s price is now above the “Cloud” or ‘Kumo,’ a region thought to hold potential support or resistance. In the future, this adds weight to this optimistic signal. An asset is commonly believed to be in a strong uptrend and will likely continue. It is a positive indication to do so when its price is above the cloud. John Bollinger’s analysis recommends being cautious in the short term, but this setup presents an optimistic scenario. The price of bitcoin was $69,846 as of the time of publication.
