John Bollinger

John Bollinger is a renowned technical analyst and creator of the Bollinger Bands indicator. In the realm of cryptocurrency trading, Bollinger Bands are widely used to analyze price volatility and potential price movements.

Bollinger Bands consist of a simple moving average (SMA) in the center, flanked by two bands that represent standard deviations of the SMA. The upper band is typically set two standard deviations above the SMA, while the lower band is set two standard deviations below the SMA.

Traders use Bollinger Bands to identify potential entry and exit points in the market. When the price touches or crosses the upper band, it may indicate that the asset is overbought and could be due for a reversal. Conversely, when the price touches or crosses the lower band, it may suggest that the asset is oversold and could be poised for a bounce.

For example, if the price of Bitcoin touches the upper Bollinger Band and then starts to decline, some traders might interpret this as a signal to sell, anticipating a price reversal. Conversely, if the price touches the lower Bollinger Band and then begins to rise, traders might view this as a buying opportunity, anticipating a potential uptrend.

Bollinger Bands are not foolproof indicators and should be used in conjunction with other forms of analysis and risk management strategies. However, they remain a popular tool among cryptocurrency traders for assessing market volatility and potential price movements.