Bitcoin is attempting its first major Bollinger Bands breakout in months, though indicator creator John Bollinger appears more optimistic about the setup than some traders.
Key points:
- Bitcoin is facing strong resistance as it tries to secure daily closes above the upper Bollinger Band.
- The surge in volatility comes just weeks after the Bands recorded their tightest range ever.
- Meanwhile, creator John Bollinger is capitalizing on the “positive” trading signals as part of his investment strategy.
Traders are divided as Bitcoin pushes against the upper Bollinger Band resistance
According to TradingView data, BTC/USD on Wednesday recorded its second consecutive daily close above the upper Bollinger Band on the daily chart — a feat not seen since mid-January.
The Bollinger Bands indicator — widely used to measure volatility and momentum — recently recorded its tightest range ever for Bitcoin, signaling that a major move could be approaching.
That setup fueled expectations of a breakout, though traders remained divided on whether the move would be bullish or bearish, while also anticipating a sharp increase in volatility.
Reacting to Bitcoin’s push toward the upper Bollinger Band, trader SuperBro warned that the current price zone contains several potential rejection levels.
“Closed above the upper Bollinger Band, above the trendline on closing prices, but just below the log trendline on wicks,” SuperBro wrote in a post on X.
The trader also noted that most remaining liquidation targets are now concentrated in long positions beneath the current price, as many short positions have already been wiped out.
“There are relatively few short liquidations remaining up to 85K compared to long liquidations down to 74K,” they added.
“However, bulls still have the momentum advantage and I don’t yet see a good reversal setup. Despite the liquidation imbalance, I’m holding tight to see if we can blast through.”
John Bollinger revealed that one of his investment fund’s proprietary trading models had turned “positive” on Bitcoin, prompting the fund to open a position accordingly.
“Overheated” Bollinger signal reappears after 18 months
Wednesday also marked another key Bollinger Bands development, this time involving the market value to realized value (MVRV) ratio for speculative Bitcoin investors.
The metric — which compares Bitcoin’s market capitalization with the price at which coins last moved onchain, known as the realized cap — has recently drawn renewed attention.
A Bollinger Bands-based variation of the indicator entered “overheated” territory for the first time since late 2024, according to the X analytics account named after economist Frank Fetter.
The last time the signal reached similar levels, BTC/USD was in the early stages of its historic rally toward $100,000 for the first time.
Asked whether “overheated” conditions implied a price reversal, the account said this was “not necessarily” a given outcome.
