Bitcoin Price Poised for a Breakout, According to Important Indicator

In a tweet posted early this morning, Ali highlighted that the Bollinger Bands are “squeezing” on the 4-hour chart for Bitcoin (BTC), a classic technical signal that often precedes heightened volatility.

What the Chart Shows

The accompanying chart, taken from TradingView, displays Bitcoin’s recent price action on a 4-hour timeframe. The chart shows a consolidation phase where price is trading sideways between roughly $93,000 and $95,000. More importantly, the Bollinger Bands have contracted significantly during this range-bound movement.

This “squeeze” is visually evident — the upper and lower bands are drawing closer together, suggesting that volatility has dropped to a low point. Historically, such squeezes precede powerful breakouts — either upward or downward — depending on how the market resolves the consolidation.

What This Means for Bitcoin

Bitcoin’s current squeeze on the 4-hour chart suggests that traders should prepare for a potential breakout. While the direction is uncertain, the tight range between $93,000 and $95,000 serves as a key battleground. A break above or below this zone, particularly with strong volume, could trigger the next significant trend.

Key Levels to Watch

Resistance: Around $95,000 — a breakout here could trigger bullish momentum. Support: Around $93,000 — a drop below this level might lead to further downside.

Understanding Bollinger Bands

Bollinger Bands are a popular technical analysis indicator developed by John Bollinger. They consist of three lines:

Middle Band: A simple moving average (typically 20-period). Upper Band: Two standard deviations above the middle band. Lower Band: Two standard deviations below the middle band.

These bands expand and contract with market volatility. When the price becomes more volatile, the bands widen. When the price consolidates, the bands tighten — forming what traders call a “squeeze.”

A squeeze itself doesn’t predict the direction of the breakout but signals that a move is coming. Traders often wait for a strong breakout from the squeeze zone — confirmed by high volume — before entering a trade.

Conclusion

While no indicator can predict market direction with certainty, Bollinger Band squeezes are time-tested setups that often precede major price action. Bitcoin’s tightening 4-hour chart should have traders on high alert for a breakout. Whether bullish or bearish, the next move could be fast and decisive.

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