It might be better to take short positions with Bitcoin

Bitcoin (BTC) hit a high of $ 10,300 this week. This is not an outbreak and investors should be prepared for losses, says renowned analyst John Bollinger. In a tweet on June 2, the creator of the Bollinger Band said that the brief rise in the largest cryptocurrency to three-month highs was an anomaly.

https://twitter.com/bbands/status/1267942061900066816

 

Bollinger warns traders: be careful or short positions

According to the Bollinger Bands for the BTC / USD pair this week, the surge to over $ 10,300 has put the pair in an area that usually signals an upcoming bull run.Bollinger Bands use two standard deviations to represent a limit above and below a simple moving average price. Usually this is the 20-day moving average.If an asset’s price breaks out of the range between the two bands, it indicates that volatility is rising or falling. This behavior tends to be preceded by a narrowing of the belt contours.Bitcoin clearly held in the spread between the two bands in May, indicating lower volatility. For Bollinger himself there was no reason to think that the outbreak was real this week.

 

Bitcoin uprising?

The indicator has proven to be efficient in tracking Bitcoin’s bull and bear cycles in the past. It was no different at the beginning of 2020. The bands narrowed in December, followed by a sustained upward trend at the beginning of the year.