In his latest tweet, veteran trader John Bollinger has commented on the predictive power of his indicator that ostensibly foresaw Bitcoin’s latest upward move long before Elon Musk took to Twitter:
It seems that Bollinger Bands have feelings. After being repeatedly trashed by a certain now-banished malcontent, they put in a picture perfect W bottom in #Bitcoin.
Front-running Elon Musk’s Bitcoin embrace
The Bollinger Bands trading indicator comes in handy for spotting W-bottoms ahead of uptrends and M-tops ahead of downtrends.
The Jan. 21 low of $28,791 is outside the lower band while the Jan. 27 low of $29,104 is practically inside the lower band, slightly penetrating it.
Usually, such a formation indicates that a strong uptrend is in the offing, which is exactly what happened on Jan. 29. Tesla CEO Elon Musk adding Bitcoin to his bio spurred a strong rally, allowing Bitcoin to reach a multi-week high of $38,620.
Image by tradingview.com
Bitcoin is plunging with stocks
The stock market is currently enduring a violent sell-off. The Dow dropped below 30,000 during this trading session after shedding over 600 points.
Enfeebled by this stock market crash, Bitcoin has pared a substantial portion of its recent “Elon pump,” plunging over eight percent from the aforementioned peak.
The cryptocurrency is now sitting slightly above the middle of the volatility range after soaring near the top band earlier today.