Bitcoin nearly approached $9,500! Inventor of the Bollinger Bands: Caution in observing future trends, a major correction may be imminent

Over the past two months, Bitcoin has been hovering above the key psychological level of $9,000. Investors seem to be fully immersed in the DeFi market frenzy, and with Bitcoin experiencing a lack of new capital inflow, its volatility has dropped to a new low in over a year. Even legendary trader John Bollinger believes that if the future trend is not ideal, Bitcoin will face "big trouble."

Bitcoin Volatility Drops to Low Levels

According to derivatives data platform Skew, Bitcoin volatility has nearly reached the lows seen before the major bear market collapse in November 2018, resembling the low volatility of that time when Bitcoin eventually broke below the $6,000 support that held for two months.

Nevertheless, Bitcoin rose to $9,437 yesterday evening, marking the second-highest level since the 9th of this month. However, legendary trader John Bollinger remains cautious, suggesting investors should be wary of the future trend. In a tweet, he stated:

The Bollinger Bands continue to tighten, and Bitcoin's price has broken above the upper band. We need to watch closely to see what happens next, as failure to do so could lead to a significant retracement, indicating a possible false breakout.

Bollinger Bands Creator: John Bollinger

John Bollinger invented the technical analysis indicator - Bollinger Bands (BBands, BBs) in 1980. This indicator is widely used for predicting trends in financial instruments and as a volatility indicator for long-term price movements.

In fact, this is not Bollinger's first time paying attention to Bitcoin trends. Looking back at reports from last year, he has been involved in cryptocurrency trading markets for three years and believes that these assets have much less "noise" compared to traditional financial markets. He pointed out:

Stock markets are full of noise, and have been since the introduction of futures and ETFs. Therefore, Bitcoin is an important asset for applying "technical analysis indicators." By using the rules of traditional technical analysis, investors can perform very well in the crypto market.

In addition, Bollinger also warned in a tweet on October 17th last year that Bitcoin might be forming a bear trap. On the 23rd, Bitcoin fell from above $8,100 to over $7,300, and as he predicted, on the 26th it broke the $10,000 mark, setting off a trap for short sellers.