Renowned technical analyst John Bollinger has issued warnings about risks for Bitcoin traders and other cryptocurrencies following a observed Bollinger Band squeeze.
What is a 'Head Fake'?
The term 'head fake,' originally from basketball, describes a situation where an asset moves sharply in one direction before sharply reversing course, thus catching traders off-guard. Bollinger warns that such a movement may occur in the cryptocurrency market.
Recent Movements of Bitcoin
On August 3, Bitcoin plunged to a multi-week low of $111,919 on the Bitstamp exchange, before recovering to $115,732 earlier this week. Bollinger believes that this downturn may have turned out to be a bear trap.
Bollinger's Predictions
Bollinger noted that the same squeeze pattern cannot be observed on cryptocurrency exchange-traded funds (ETFs) since they do not trade during the weekends. Currently, Bitcoin is trading at $115,229 on Bitstamp. Earlier in July, Bollinger predicted that Bitcoin was setting up for a breakout, which was confirmed when the asset reached its all-time high of $122,838 on July 14.
John Bollinger's predictions about a possible 'head fake' in the Bitcoin market emphasize the risky conditions for traders, necessitating vigilance and thorough analysis of the current situation.
