Bitcoin (BTC) hitting highs of $10,300 this calendar week isn't a breakout and investors should caryatid for losses, renowned annotator John Bollinger has warned.

In a tweet on June 2, the Bollinger Bands indicator creator said that the largest cryptocurrency's cursory trip to 3-month highs was an anomaly.

Bollinger to traders: Be cautious or short

According to charts showing Bollinger ring beliefs for BTC/USD this week, the spike above $10,300 took the pair into territory that normally dictates an upcoming bull run.

Bollinger bands use two standard deviations to plot a boundary above and below a unproblematic moving average toll. Normally, this is the 20-day moving average.

When an asset price breaks out of the space between the two bands, the event suggests that volatility upwardly or down is incoming. This behavior tends to be preceded by a narrowing of the band contours.

Bitcoin had stuck rigidly to the range between the two bands in May, indicating lower volatility. For Bollinger himself, there was no reason to heed the hint that this week'due south breakout was genuine.

He tweeted:

"The is a Caput Fake at the upper Bollinger Ring for $btcusd, time to be cautious or brusk."

BTC/USD chart showing recent

BTC/USD nautical chart showing recent "head fake." Source: TradingView

Bitcoin'due south ain riot?

The indicator has previously shown efficiency in tracking Bitcoin bull and bear cycles, with the start of 2020 proving to be no exception. December saw a narrowing of the bands, followed by sustained upside equally this twelvemonth began.

Bollinger's warning comes every bit Bitcoin appeared to gain from unrest in the United states of america and a drop in the value of the dollar. As Cointelegraph reported, the panic besides fueled gilded, while any major gains for Bitcoin could rest on how events continue to unfold.

Central force is slowly recovering from weakness last month, with miner participation ready to continue improving afterwards a 2nd negative difficulty aligning in ii days' time.