Bollinger Bands as a bubble/top predictor

2021년 3월 30일

I have been messing around with this idea for some time, and wanted to post it to TV to keep track of it as time passes.

The BB can be an effective bubble indicator on a LONG TIME FRAME for the following reasons -
-When prices are EXTREMELY high, the band will stretch to an enormous width, indicating a bubble in prices by displaying possibility of an equally massive drop. Though these bottom bands are not credible (at 20k in 2017, the bottom band forecasted a possible bottom of -$985, lol), they do accurately predict a bubble.

-When the band squeezes tightly around price, like after each bubble, this is a sign of volatile price action to come, and subsequently presents a buying opportunity.

How to predict the very top of a bubble using this strategy -
-Note the large volume spikes at the culmination of prices towards the top.

-As I have noted by the large circles on the chart, the BB will generally create final sharp angle before smoothing out into a flat shape and beginning to recoil back into a normal range. As in, this would be the last impulse in a parabolic move.

I believe there is still juice in this market, because in a parabolic run, price movements actually increase with time. Therefore, I expect us to be seeing 10k+ moves on the daily at some point. I would not be surprised if price increased by 20k+ on the final daily. Anyway, happy trading. Or in my case, happy holding.