Bitcoin It has been on the way to reform Since it reached its all-time high of $108,135 on December 17th. Notably, this correction has even led to a 10% drop in the price of leading digital currencies as of writing. It quickly fell below $93,000.
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This significant decline has seen Bitcoin retest the Bollinger Bands, and technical analysis suggests a move towards a price target around $178,000 from here.
Bitcoin retests the upper monthly Bollinger band
Bitcoin Recent price correction It has attracted commentary from cryptocurrency analyst Tony Severino, who has highlighted a critical retest of the monthly Bollinger Band top band. Share your insight On social media platform X, Severino emphasized the importance of this technical indicator that measures market volatility and potential reversal points.
According to him, this development reflects a similar pattern seen in January 2024, which eventually led to a significant increase after a similar retest.
According to the daily candlestick chart shared by Tony Severino, the upper Bollinger Band is currently sitting just above $96,000, which is roughly around the current price of Bitcoin. This retest of the Bollinger Bands suggests that Bitcoin may be entering a new phase of bullish movement after the recent correction.
Historical echoes: January 2024's 86% rally offers a blueprint
Severino's analysis draws parallels between the current price movement and Bitcoin's behavior in early 2024. He noted that in January 2024, a similar retest of the upper monthly Bollinger band took place before the 86% rally in Bitcoin's price.
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 as Bitcoin price dropped to $40,000 to test the upper Bollinger band. Not only did the test serve as a launchpad for the continued uptrend, it also pushed Bitcoin to break a then-record high and pass $70,000 in March for the first time in its history.
If Bitcoin repeats the 86% rally at this point, it could rise to $178,000, which Severino noted aligns with the upper range of his target zone. In another analysisThe analyst predicted that Bitcoin could reach its market high as early as January 20, 2025.
At the time of writing, Bitcoin is trading at $96,402 and is still hovering around the bullish band. Interestingly, the leading digital currency has fallen by 2.11% and 5.4% in the last 24 hours and 7 days, respectively.
This has a setback led to realization More than $5.72 billion in bitcoin gains, adding to short-selling pressure. The impact of this correction is evident in Bitcoin's Relative Strength Index (RSI), which has fallen sharply from 69 on December 17 to the current 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 served as a significant support zone for Bitcoin since September. If this support holds, it could be the basis for Bitcoin to move towards $178,000.
Featured image from ABC News, chart from TradingView
