Bitcoin Bollinger Band Breakout Starts To Squeeze Shorts | BTCUSD Analysis October 26, 2022

Tony "The Bull" Severino

1 year ago

4 mins read

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In this episode of NewsBTC’s daily technical analysis videos, we take a look at the ongoing Bitcoin price breakout above the upper Bollinger Band on daily BTCUSD charts and provide some insight into what the next targets might be.

Take a look at the video below:

VIDEO: Bitcoin Price Analysis (BTCUSD): October 26, 2022

The breakout across crypto has already resulted in a substantial amount of shorts liquidated. How far could this Bitcoin rally run?

Bitcoin Rally Approaches Middle Of Trading Range

Bitcoin price is now at the middle-point of a horizontal trading range, making for a natural stopping point for profit-taking and to draw in a fresh set of short positions. Busting through the range median will result in another attempt at around $25K.

More importantly, the Bitcoin price is continuing to make a strong push outside of the Bollinger Bands on daily timeframes. After tightening for so long, and now starting to expand, the rally could have more legs than bears expect.

BTC is attempting to break through the median of a the trading range | Source: BTCUSD on TradingView.com

BTCUSD Weekly Hits Resistance At Middle Bollinger Band

That is because Bitcoin price has already found and met resistance at the mid-Bollinger Band on weekly timeframes. The key resistance level at the 20-week SMA, was where I placed a hedge short entry today in case the rally is rejected instead.

If there is no rejection and Bitcoin keeps rising, we could be looking at a full-blown return to a crypto bull run. Zooming out shows just how significant a weekly close above the middle Bollinger Band would be.

Turning on Bollinger Band Width shows that the bands are some of the tightest ever. The last two instances were prior to the 50% breakdown to the 2018 bear market bottom. Before that was prior to the epic 2017 Bitcoin bull run that made the cryptocurrency a household name.

Importantly, in 2018, Bitcoin price was below the mid-Bollinger Band, while in 2016 it was above the mid-BB. The trend is more likely to continue on whatever side of the mid-BB price is on. If the weekly BTCUSD chart closes above the middle band and holds, it could be off to the races once again for Bitcoin bulls.

The crypto bull run could be back in with a weekly close above the mid-BB | Source: BTCUSD on TradingView.com

Crypto Profit Targets To Watch For Using The Ichimoku

Back to those weekly Bollinger Bands, for a sense of what happens if BTCUSD were to get through the mid-BB. The upper band would become the next logical target, located at $23,800. Much like Bitcoin has done on daily timeframes, pushing outside of the upper band is possible given the abundance of short interest in the market.

Replacing the Bollinger Bands with the Ichimoku on the same weekly timeframe, also tells us a lot about what could happen next. Bitcoin price is pushing above the Tenkan-sen, making the next major resistance level the Kijun-sen located at $32,000. In 2018, we can see that the two lines were much closer together, but anything is possible with so much energy built up in the market.

During the first bounce from the 2018 bear market bottom, Bitcoin price pushed all the way outside of the top of the cloud, only to make it out of it, but ultimately lose it once again on Black Thursday 2020. If Bitcoin price were to reach the top of the cloud, the rally could be stopped at $43,000. Once above the cloud, all that’s left for Bitcoin is the moon.

Bitcoin price is stuck at former ATH resistance | Source: BTCUSD on TradingView.com

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Featured image from iStockPhoto, Charts from TradingView.com

Tony "The Bull" Severino

Tony "The Bull" Severino, CMT, is a distinguished figure in the cryptocurrency analysis sector, renowned for his in-depth technical expertise and innovative approach to market trends. As the Head of Research at NewsBTC, Tony leads a team dedicated to providing cutting-edge insights and forecasts, helping both novice and experienced traders navigate the complexities of the crypto market.
A seasoned Chartered Market Technician, Tony's prowess in identifying and capitalizing on market patterns is unmatched. His academic and professional journey in market analysis has firmly established him as a leading authority in technical trading strategies. Tony’s approach is heavily influenced by the principles of Elliott Wave Theory, a method known for its rigorous assessment of investor psychology and price movements.

Beyond his role at NewsBTC, Tony is the visionary founder of CoinChartist.io, an educational platform aimed at demystifying the nuances of cryptocurrency trading. CoinChartist.io serves as a valuable resource for traders seeking to enhance their technical analysis skills. The platform offers a range of learning tools and resources designed to empower traders with the knowledge to make informed trading decisions.

In addition to his educational initiatives, Tony is a prolific author and a dominant voice in the crypto community. He writes the CoinChartist VIP newsletter, a weekly dispatch that has become a staple among crypto enthusiasts, revered for its insightful analysis and actionable trading advice. This newsletter has consistently ranked as a best-seller on SubStack, boasting thousands of subscribers who rely on Tony’s expertise to guide their trading strategies.

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Before his ascent in the financial analysis world, Tony honed his skills in journalism. His background in this field has endowed him with a unique ability to present intricate market dynamics in a clear and compelling manner, making his insights highly sought after by a broad audience that ranges from casual readers to professional traders.
His professional affiliations underscore his commitment to excellence and continuous learning. As a partner of Elliott Wave International and TradingView, Tony collaborates with other leading experts to enhance his knowledge and skills. His active membership in the CMT Association further aligns him with the highest standards of industry practices and ethics.

Tony’s nickname, "The Bull," aptly reflects his aggressive and optimistic outlook on the cryptocurrency markets. His forecasts often anticipate significant upturns, earning him a reputation for bullish predictions that have frequently led to lucrative outcomes for those who follow his advice.

In summary, Tony "The Bull" Severino, CMT, is more than just a technical analyst; he is a mentor, educator, and innovator whose influence in the cryptocurrency space continues to grow. His dedication to advancing the understanding of market forces and his commitment to providing high-quality, reliable analysis make him a pivotal figure in the world of cryptocurrency trading.

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