4d • Crypto / Web3
Bitcoin Won’t Drop Below $50,000 in this Cycle — Here’s Why
Definitely worth the read. Know what the bollinger bands are? I know some of yall use them in here
Bollinger Bands are a technical analysis tool used to measure volatility and identify potential reversal points, breakouts, and overbought/oversold conditions in a market.
Here’s the clean, accurate breakdown:
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What Bollinger Bands Are
Bollinger Bands consist of three lines plotted around price:
1. Middle Band (Basis Line)
A 20-period simple moving average (SMA) by default.
Represents the average price over the last 20 candles.
2. Upper Band
Middle band + 2 standard deviations.
Shows the upper volatility boundary.
3. Lower Band
Middle band – 2 standard deviations.
Shows the lower volatility boundary.
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What Bollinger Bands Tell You
1. Volatility
Bands widen → volatility increasing
Bands contract → volatility shrinking (consolidation)
This helps anticipate breakouts.
2. Overbought / Oversold (NOT signals by themselves)
Price touching upper band = overbought conditions
Price touching lower band = oversold conditions
These are conditions, not confirmation.
3. Mean Reversion
Price tends to revert toward the middle band (20 SMA) after extreme moves.
4. Breakout Setup
Squeezes (tight bands) → high probability a big move is coming.
Breakouts often happen after a squeeze, but direction must be confirmed by volume or other indicators.
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How Traders Use Bollinger Bands
1. Reversal Strategy
Price closes outside the band (extreme)
→ Then closes back inside
→ Possible reversal toward the middle band.
2. Bollinger Squeeze
Bands contract tightly
→ Market storing energy
→ Traders watch for a breakout candle + volume.
3. Trend Riding
In strong uptrends:
Price walks the upper band
In strong downtrends:
Price walks the lower band
This tells you not to fade the move too early.
4. Price Targeting
Middle band = first target
Opposite band = stretch target
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Common Misconceptions
❌ “Touching a band means it will reverse.”
→ False. In trends, price lives on the band.
❌ “Bands predict direction.”
→ They don’t predict; they frame volatility and probabilities.
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Why It Matters for Crypto (specifically your style of analysis)
Given your focus on:
volatility cycles
market maker behavior
liquidity sweeps
reset scenarios
DCA entries and laddering
hybrid strategies (leveraged + spot)
Bollinger Bands give you:
real-time volatility compression/expansion
early clues on trend exhaustion
mean reversion opportunities
confirmation for liquidity grabs
timing for when to load or lighten positions
Crypto is 24/7 and highly volatile → Bollinger bands work better here than on traditional markets.
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Bitcoin Won’t Drop Below $50,000 in this Cycle — Here’s Why
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