Bitcoin
It will soon be ‘do or die’ for Bitcoin price, says analyst
Josh Olszewicz, a renowned crypto analyst, recently shared criticism insights in the immediate future of the Bitcoin price, employing two technical analysis frameworks: the Ichimoku Cloud and the Bollinger Bands. These tools suggest pivotal moments that could shape Bitcoin’s price trajectory in the short and medium term.
Bitcoin Analysis Using the Ichimoku Cloud
In the first daily Ichimoku Cloud chart, Olszewicz highlights a critical moment for Bitcoin as it navigates this complex indicator. The Ichimoku Cloud, known for providing support and resistance levels as well as momentum and trend direction, shows Bitcoin trading near the edge of the cloud. This is significant because a break above the cloud could suggest a optimistic outlookwhile falling below the cloud often signals bearish momentum.
Here, Olszewicz emphasizes a “do or die” scenario for Bitcoin. The price of Bitcoin, last recorded on the chart at $64,570, is approaching the edge of the cloud. “Nobody likes ultimatums, but here it’s all or die very soon on the daily BTC cloud,” he warned.
A significant aspect of the Ichimoku Cloud chart is the relationship between the Tenkan-Sen (red line) and the Kijun-Sen (blue line). The Tenkan-Sen, which is a short-term moving average, remains above the Kijun-Sen, a long-term moving average, indicating positive momentum in the short term.
Weekly Bollinger Bands Analysis
Moving to the weekly chart equipped with Bollinger Bands, Olszewicz discusses another potential inflection point. Bollinger Bands serve as a measure of volatility – narrow bands suggest low volatility, while wider bands indicate higher volatility. The Bitcoin chart shows a narrowing of these bands around the current price level, which may precede a significant price movement, often referred to as “Bollinger band compression”.
The fact that Bitcoin is hovering just above the midline (the 20-period moving average) of the Bollinger Bands at $64,238 points to a tenuous balance between buying and selling forces. However, the narrowing of the bands is particularly notable because it can lead to a decisive breakout or breakout, depending on other market factors and traders’ sentiment.
If Bitcoin breaks below the midline, the next support could be found at the lower Bollinger Band, currently positioned around $51,792, which could represent a significant drop in price. On the other hand, if Bitcoin breaks out of the midline and gains upward momentum, it could reach the upper part of the Bollinger Band, situated at approximately $76,684, indicating a potential recovery.
The analyst points out that understanding the implications of a Bollinger band squeeze can be crucial for traders, as such periods of low volatility often end in sharp price movements. “If you didn’t like the cloud ultimatum, here are the weekly BBands,” commented Olszewicz.
Both charts, although they use different analytical tools, converge on a similar narrative: Bitcoin has potential inflection point which could define its price action in the coming days or weeks. Current levels near the upper limits of the Ichimoku Cloud and Bollinger Bands underline the tension in the market.
At press time, BTC traded at $65,494.
Featured image created with DALL·E, chart from TradingView.com