The Missing Ingredient From A Full On Bitcoin Reversal

Bitcoin price is back around $35,000 and has failed to retake $40,000 despite several low timeframe reversal signals building.
When looking back at past breakdowns following significant rallies, there could be a missing ingredient needed for a full on reversal, and it could have to do with the Bollinger Bands.
All About The Bollinger Bands And How To Use Them Effectively
The Bollinger Bands are named after the tool’s creator, John Bollinger. The tool has a variety of use cases as it applies to technical analysis, but is most notably used for measuring volatility. When the two outer bands – standard deviations of a simple moving average – begin to contract and tighten, it signals a massive release of energy is coming soon enough.
Related Reading | Could The Golden Ratio Provide Clues To The Bitcoin Bottom?
When the outer bands do expand, they also act as support or resistance, and the middle-SMA does the same. The middle-SMA can also be used reliably as a buy or sell signal when price action closes through it.
But it is that support and resistance that the outer bands often supply that might be crucial to forming a proper Bitcoin bottom and one that holds for new highs.

Bitcoin price action might require a touch of the lower BB as it has during past bear phases | Source: BTCUSD on TradingView.com
Why Bitcoin Price Action Might Need The Momentum Of The Lower Band
In the chart above, a touch of the upper band after “riding the bands” to new local highs has always resulted in a short-term top. Crossing through the middle-SMA from there switches from bull to bear market, and the downtrend doesn’t end until the bottom Bollinger Band it tapped.
The 2017 bull market peak resulted in a sharp selloff, but then price action hung around the middle band for nearly a year before the deep plunge in late November 2018. From there, Bitcoin “rode the bands” again but this time on the way down.
Related Reading | How Extreme Fear In Crypto Correlates With Bitcoin Bottoms
When the middle-SMA was finally reclaimed, the top cryptocurrency shot right back to $14,000 and hit the upper band once again. Losing the middle-SMA once again started a bearish phase. A bull run likely would have blossomed sooner but COVID had other plans, and after Black Thursday instead the buy signal stuck.
From there, Bitcoin rocketed to above $60,000 where the current all-time high now set. Bitcoin price is once again simply hanging around and might need to touch the lower Bollinger Band to gain enough momentum to push through resistance and reclaim highs.
As history has shown, however, getting back above that middle-SMA means a lot, and is the first step toward bulls restarting the rally again.
Featured image from iStockPhoto, Charts from TradingView.com

bitcoin
Bitcoin (BTC) $ 17,008.46
ethereum
Ethereum (ETH) $ 1,269.66
tether
Tether (USDT) $ 1.00
bnb
BNB (BNB) $ 292.34
usd-coin
USD Coin (USDC) $ 1.00
binance-usd
Binance USD (BUSD) $ 1.00
xrp
XRP (XRP) $ 0.395597
dogecoin
Dogecoin (DOGE) $ 0.102122
cardano
Cardano (ADA) $ 0.324820
matic-network
Polygon (MATIC) $ 0.919517
polkadot
Polkadot (DOT) $ 5.56
staked-ether
Lido Staked Ether (STETH) $ 1,255.74
okb
OKB (OKB) $ 22.02
shiba-inu
Shiba Inu (SHIB) $ 0.000009
litecoin
Litecoin (LTC) $ 76.13
dai
Dai (DAI) $ 1.00
tron
TRON (TRX) $ 0.054221
solana
Solana (SOL) $ 13.57
uniswap
Uniswap (UNI) $ 6.15
avalanche-2
Avalanche (AVAX) $ 13.85
chainlink
Chainlink (LINK) $ 7.36
wrapped-bitcoin
Wrapped Bitcoin (WBTC) $ 16,978.05
leo-token
LEO Token (LEO) $ 3.80
cosmos
Cosmos Hub (ATOM) $ 10.24
ethereum-classic
Ethereum Classic (ETC) $ 19.58
monero
Monero (XMR) $ 147.94
the-open-network
The Open Network (TON) $ 1.81
stellar
Stellar (XLM) $ 0.087726
bitcoin-cash
Bitcoin Cash (BCH) $ 111.53
quant-network
Quant (QNT) $ 130.65
algorand
Algorand (ALGO) $ 0.241258
crypto-com-chain
Cronos (CRO) $ 0.064480
filecoin
Filecoin (FIL) $ 4.51
apecoin
ApeCoin (APE) $ 3.97
near
NEAR Protocol (NEAR) $ 1.71
vechain
VeChain (VET) $ 0.019435
hedera-hashgraph
Hedera (HBAR) $ 0.048337
internet-computer
Internet Computer (ICP) $ 4.21
flow
Flow (FLOW) $ 1.09
terra-luna
Terra Luna Classic (LUNC) $ 0.000181
elrond-erd-2
MultiversX (Elrond) (EGLD) $ 44.06
frax
Frax (FRAX) $ 1.00
eos
EOS (EOS) $ 0.932120
trust-wallet-token
Trust Wallet (TWT) $ 2.41
tezos
Tezos (XTZ) $ 1.02
the-sandbox
The Sandbox (SAND) $ 0.590686
aave
Aave (AAVE) $ 63.88
chiliz
Chiliz (CHZ) $ 0.168791
theta-token
Theta Network (THETA) $ 0.898939
huobi-token
Huobi (HT) $ 6.81