Bitcoin price ended last week with a sharp, $3,000 decline, but the leading cryptocurrency by market cap is already right back where it left off, nearly retesting above $19,000 and setting a new all-time high.
Even if the cryptocurrency pulls back again before the clock strikes 7:00 PM ET, the chances of a pivotal November close outside of the Bollinger Bands remain high. Here’s why this is so important, and what this might mean for the upcoming Bitcoin bull run.
Bitcoin Price Stages Full Weekend Recovery From Thanksgiving Carnage
The first-ever cryptocurrency has been surging more so than it has since the crypto bubble. During that phase, all eyes were on Bitcoin as the asset captured the imaginations of investors everywhere and it set its record all-time high price of $20,000.
Speculation over the promise and potential of Bitcoin began to outpace what the market believed the asset was worth, and a bear market followed.
But now, Bitcoin is back at $19,000 and only a few hundred dollars is separating it from setting a new price record.
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The leading cryptocurrency by market cap went as high as $19,500 last week before whales began unloading at the high mark up and taking profit on what has been a stellar year in price appreciation.
Tonight, the November monthly close could cap off the tremendous run doing something it hasn’t done since the previous record was reached: close a monthly candle outside of the Bollinger Bands.
Bitcoin could close the November monthly candle outside of the Bollinger Bands for the first time since 2017 | Source: BTCUSD on TradingView.com
Monthly Close Outside Of The Bollinger Rands To Lead Ride To Next Cycle Peak
The Bollinger Bands are a technical analysis indicator created by John Bollinger. They can be used to find support and resistance, measure volatility, and much more. It is perhaps one of the more useful and commonly used tools in the worth of technical analysis today.
Breaking outside of the Bollinger Bands and closing above them, is especially notable. The chart below shows what happens when Bitcoin closes outside of the monthly Bollinger Bands – a full-blown bull run ensues.
There are a few strategies that traders can use related to the Bollinger Bands, and “riding the bands” after a breakout with at least 1.5 times the normal volume is one of them.
Closing outside of the Bollinger Bands on monthly timeframes prompts an unstoppable rise | Source: BTCUSD on TradingView.com
In the chart above, the moment Bitcoin reclaimed its all-time high and closed a monthly candle outside of the Bollinger Bands, all bets were off for crypto bears for nearly the next entire year.
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If Bitcoin price closes tonight’s monthly candle above roughly $15,000, then the feat will complete, and the leading cryptocurrency could continue to rip from here all throughout 2021 until it finally peaks once again.
Featured image from Deposit Photos, Charts from TradingView.com