Bollinger Bands is a technical tool used in the crypto industry to analyze price volatility and potential trends. It can be used to identify:
- breakouts or trend reversals (if the price breaks through the upper or lower band, it may indicate a shift in market momentum or a new trend forming);
- overbought (price is near the upper band) or oversold conditions (price is near the lower band).
Traders use this information to make trading decisions, such as selling when the price is overbought or buying when the price is oversold.
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