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Bitcoin He was on the path to correction Since hitting a new all-time high of $108,135 on December 17. It is worth noting that this correction saw the leading cryptocurrency decline by about 10% as of the time of writing this report It broke below $93,000 very quickly.
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This notable decline led to Bitcoin retesting the Bollinger Bands indicator, and technical analysis suggests a bounce from here to reach the target price around $178,000.
Bitcoin retests monthly upper Bollinger band
Bitcoin Recent price correction It caught the attention of cryptocurrency analyst Tony Severino, who highlighted the crucial retest of the monthly upper Bollinger band. Share his thoughts On the social media platform X, Severino emphasized the importance of this technical indicator, which measures market volatility and potential reversal points.
According to him, this development reflects a similar pattern observed in January 2024, which eventually led to a significant rise after a similar retest.
According to a daily candlestick chart shared by Tony Severino, the upper Bollinger band currently sits just above $96,000, which is around the current price of Bitcoin. A retest of the Bollinger Band suggests that Bitcoin may be entering a new phase of bullish momentum after recent corrections.
Historical Echoes: The 86% rally in January 2024 provides a blueprint
Severino’s analysis draws parallels between the current price action and Bitcoin’s behavior earlier in 2024. He noted that in January 2024, a similar retest of the monthly upper Bollinger band preceded an 86% rise in Bitcoin’s price.
At the time, Bitcoin was trading near $46,000, following a strong price rally introduced from late 2023. However, January saw a brief correction, with Bitcoin price falling to $40,000 to test the upper limit of the Bollinger Bands. This test served as a launching pad for not only a continued rally, but also pushed Bitcoin to break its all-time high and surpass $70,000 in March for the first time in its history.
If Bitcoin repeats that 86% rally at this point, it could rise to roughly $178,000, which Severino noted is in line with the upper range of his target zone. And in another analysisThe analyst predicted that Bitcoin would reach its highest market levels as early as January 20, 2025.
At the time of writing, Bitcoin is trading at $96,402, still hovering around the upper border of the Bollinger Band. Interestingly, the leading cryptocurrency is currently down 2.11% and 5.4% over the past 24 hours and seven days, respectively.
This has a decline led to an investigation More than $5.72 billion in Bitcoin profits, adding to short-term selling pressure. The impact of this correction is evident in Bitcoin’s relative strength index (RSI), which fell sharply from 69 on December 17 to its current reading of 45.
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However, there are reasons to believe that selling pressure may ease. This is because the RSI level of 43 has been an important support area for Bitcoin since September. If this support holds, it could provide the basis for Bitcoin’s move towards $178,000.
Featured image from ABC News, chart from TradingView
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