Quick take:
- Yesterday, John Bollinger had cautioned that Bitcoin’s attempt at $20k is a classic top setup
- Bitcoin has since dropped from $19,900 to $18k in a flash crash
- The 50-day moving average seems like a good area for a bounce
- Other macro support zones lie at $16,300, $15,600 and $14,800
Late yesterday, the inventor of the popular charing tool of Bollinger Bands, John Bollinger, cautioned Bitcoin traders that BTC might have printed a classic top setup. Mr. Bollinger went on to explain that the setup was yet to be confirmed but seasoned traders ‘should wash their hands’.
Mr. Bollinger’s statement can be found below along with a screenshot of the Bitcoin chart that he shared to further elaborate his idea.
OK, time to pay attention, $BTCUSD. That is a classic top setup. No confirmation yet and the setup could easily be overrun, but wise traders should wash their glasses.
If You Can’t Take the Heat, Get Out of the Kitchen – Bollinger
Mr. Bollinger would later add to his analysis by using an old saying referring to the general situation of Bitcoin. According to Mr. Bollinger, ‘if you can’t take the heat, get out of the kitchen’. Mr. Bollinger went on to add that he likes the heat. His comments can be found in the following tweet.
The old saying goes: “If you can’t take the heat get out of the kitchen.” Well I like the heat, so bring it on.
— John Bollinger (@bbands) November 30, 2020
Bitcoin Drops By Close to $2k
A few hours after Mr. Bollinger cautioning about a possible top for Bitcoin, the King of Crypto posted a 2020 peak value of $19,900 – Binance rate. However, as soon as this value was reached, Bitcoin fell fast and furious to $18,000 and is currently trading at $18,800.
From the 1-hour time frame, Bitcoin has printed a classic Bart Simpson pattern that could confirm Mr. Bollinger’s analysis of a possible top. This further points to Bitcoin possibly beginning a pullback that could see BTC revisit the following known support areas.
- $18,300
- $17,800
- $17,500
- $16,800
- $16,300
- $15,600
- $14,800
Bitcoin’s 50-day moving average might also provide an area for a possible bounce for the King of Crypto. At the time of writing, this moving average is hovering around the $15k price area.
