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Bitcoin he was on the mend as it reached an all-time high of $108,135 on December 17. Notably, this correction has seen the leading cryptocurrency decline by nearly 10% up to the time of writing even breaking below $93,000 very quickly.
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This significant decline has seen Bitcoin retest the Bollinger Bands, and technical analysis suggests a jump from here to reach the target price around $178,000.
Bitcoin Retests Monthly Upper Bollinger Band
Bitcoin’s recent price adjustment it caught the eye of crypto analyst Tony Severino, who highlighted the key test of the monthly Bollinger Band group. Sharing his ideas on social media X, Severino emphasized the importance of this technical indicator, which measures market volatility and potential reversal points.
According to him, this development shows the same pattern seen in January 2024, which eventually led to a large rally after the same retest.
According to the daily candlestick chart shared by Tony Severino, the Upper Bollinger Band is currently just above $96,000, which is roughly the same as Bitcoin’s current price. This retesting of the Bollinger Band suggests that Bitcoin may be entering a new bullish phase after recent corrections.
Historical Echoes: January 2024’s 86% Rally Provides a Blueprint
Severino’s analysis reveals similarities between current price movements and the behavior of Bitcoin at the beginning of 2024. He noted that in January 2024, the same test of the upper monthly Bollinger group preceded the rally of 86% in the price of Bitcoin.
At the time, Bitcoin was trading near $46,000, following a strong price rally that has been in place since late 2023. However, January saw a brief correction, with the price of Bitcoin falling below $40,000 to test the upper Bollinger Band. This test served as a launching pad for not only the ongoing rally but also pushed Bitcoin to break its current low and surpass $70,000 in March for the first time in its history.
If Bitcoin were to repeat this 86% rally at this point, it could rise to around $178,000, which Severino noted is in line with the upper range of his target area. In another analysisThe analyst predicted that Bitcoin could reach the top of the market as early as January 20, 2025.
At the time of writing, Bitcoin is trading at $96,402, still hovering around the upper Bollinger Band. Interestingly, the leading cryptocurrency is currently down 2.11% and 5.4% in 24 hours and seven days, respectively.
This pullback has it led to fulfillment more than $5.72 billion in Bitcoin gains, which added to the short-term selling pressure. The impact of this correction is visible in Bitcoin’s Relative Strength Index (RSI), which has dropped significantly from 69 on December 17 to its current reading of 45.
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However, there are reasons to believe that sales pressure may be easing. This is because the RSI level of 43 has served as an important support point for Bitcoin since September. If this support holds, it could provide the basis for Bitcoin’s move to $178,000.
Featured image from ABC News, chart from TradingView
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