Photo by Dmitry Demidko on Unsplash
Bitcoin seems in a sideways correction. There’s still uncertainty among strong and weak hands.
BTC has been in a corrective phase for over two months, and there is still uncertainty about the future price of the main cryptocurrency.
BTC/USD Daily chart, BINANCE - TradingView
BTC is traveling sideways, touching its support zone around the 61.8% Fibonacci retracement level. From the start of this sideways correction (end of May) until today, the volume has been almost stable.
The bullish peak on June 22, right after BTC touched the lower Bollinger Band, would have made you think of a reversal and a breakout of the resistance zone - placed around the 38.2% Fibonacci level.
But the bearish volume-price divergence showed that strong hands were still bearish, and that they were distributing their coins among weak hands.
BTC/USD Daily chart, BINANCE - TradingView
Currently, Bitcoin is traveling between its 20-day moving average and the lower band, while the volume is still below the 20-day volume moving average.
This article doesn’t represent financial advice: always do your own research before investing!
What are Bollinger Bands?
John Bollinger created the Bollinger Bands in 1980’. The Bollinger Bands comprise three bands: the middle band is a moving average (usually a 20-day simple moving average), the upper and the lower bands are usually plotted two standard deviations away from the moving average - but you can adjust these data. The function of the Bollinger Bands is to make you visualize volatility: they are a graphic representation of the range within which the price is moving. Using this oscillator, you can better visualize highs and lows. Bollinger Bands can also prepare you for the next range change: in fact, volatility is often seen as a cycle where contraction or sideways periods are followed by expansion, and vice versa.
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