Bitcoin Is in a Normal Consolidation Market, says Bollinger Bands Inventor
Brian Njuguna Dec 09, 2020 10:00
The inventor of the famous Bollinger Bands indicator John Bollinger has suggested that the current Bitcoin price action depicts a normal consolidation market.
Bitcoin (BTC) bulls have continuously tried to reach the $20,000 price, falling just shy of what could have been a new all-time high (ATH) price by getting to $19,832 at the end of November. BTC price has however fallen back to around the $18K level at press time, and a renowned investor seems to have predicted this price retracement.
Veteran trader and the inventor of the famous Bollinger Bands (BB) indicator John Bollinger had taken to Twitter to suggest that this price action depicts a normal consolidation market. He tweeted:
“We reached the current level for BTC/USD on November 18th and have consolidated to the point where the middle band has caught up with the price. Normal market action so far. Let's see if support can hold here.”
Bitcoin has been in a consolidation state because its price rally came to a halt on Dec. 1 after failing to breach the ATH price of $20,000. As a result, it has been moving sideways, illustrating a sharp correction.
After the Bitcoin price hit a record-breaking level of $19,832 not seen in nearly three years, Bollinger warned of an imminent retracement. He cautioned:
“Time to pay attention to BTC/USD. That is a classic top setup. No confirmation yet, and the setup could easily be overrun, but wise traders should wash their glasses.”
The crypto market was on a rollercoaster ride in the month of November, based on the record highs witnessed and its following descent to the $16K level. In November, the number of active BTC addresses either sending or receiving BTC hit the third-highest level at nearly 19.6 million, making the on-chain transaction volume rise by 47%.
Furthermore, the monthly trading volumes across crypto exchanges surged to an all-time high of $348 billion in November, representing a 125 percent increase from $154 billion recorded in October.
Time will tell what Bitcoin has in store for the crypto market because it stole the show in November by being a stone throw away from the ATH price of $20,000.
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