John Bollinger, the legendary chartist known for creating the Bollinger Bands indicator, recently took to the X social media network to issue a technical analysis warning.
He has noted that Bitcoin and several other cryptocurrencies are setting up a “head fake” following a Bollinger Band Squeeze.
The term, which originally comes from basketball, refers to a certain asset sharply moving in one direction before reversing course, thus catching traders off-guard.
A bear trap?
On Aug. 3, Bitcoin plunged to a multi-week low of $111,919 on the Bitstamp exchange before recovering to $115,732 earlier this week.
Bollinger likely refers to this downside headfake, which ended up being a trap for bears.
Notably, the legendary technical analyst added that the same pattern cannot be observed on the charts of cryptocurrency exchange-traded funds (ETFs) since they do not trade during the weekend.
Bitcoin is currently changing hands at $115,229 on the Bitstamp exchange.
Bollinger’s prescient prediction
As reported by U.Today, Bollinger correctly predicted that Bitcoin was setting up for a breakout in early July.
Bitcoin went on to reach its current all-time high of $122,838 on July 14.