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John Bollinger, a financial market trader and the inventor of the very famous Bollinger Bands indicator, has broken his silence on social networks with a new post. This time it was about the cryptocurrency market, especially Litecoin.
Mr. Bollinger posted a price chart for LTC, and as he said, seeing is believing. The choice of caption was not random, as he wanted to use the Litecoin example to answer followers’ questions about the Bollinger Band Squeeze and head fakes.
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A Bollinger Band squeeze occurs when the bands contract, indicating a period of low volatility. This often happens as the market gains momentum and before the price changes significantly. Traders see this as a potential breakout point, which could cause prices to spike or fall sharply once the tightening is lifted.
A head fake, on the other hand, is when the market appears to be about to break in one direction, but then quickly reverses. This can lead to potential losses if traders are caught off guard and act on the initial breakout without confirmation.
Litecoin (LTC) price outlook
This is exactly what we see on the Litecoin price chart. At the end of July, LTC’s Bollinger bands began to approach each other. At that point, the price rose above the upper band, but quickly fell back below.
As a result, the price of Litecoin began to plummet and the bands separated from each other.
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After finding a bottom near the lower band, Litecoin rose to around $63 per LTC amid a market-wide recovery. If the Bollinger chart is to be believed, the next big test for altcoins is $65.
A break above this could give LTC an opportunity to retest the upper band, which is currently at $75.
