Bitcoin A correction has been made on the way As it hit a new all-time high of $108,135 on December 17th. Notably, this correction has seen major cryptocurrencies drop by around 10% at the time of writing and even Very quickly breaking below $93,000.
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This significant decline has seen Bitcoin retest the Bollinger Bands, and technical analysis suggests a bounce from here to reach a price target around $178,000.
Bitcoin Retests Monthly Upper Bollinger Bands
of Bitcoin Recent price corrections has caught the eye of crypto analyst Tony Severino, who has highlighted a critical retest of the monthly upper Bollinger Band. Sharing his insight On 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 the same pattern seen in January 2024, which eventually led to a significant rally after a similar retest.
According to the daily candlestick chart shared by Tony Severino, the upper Bollinger Band is currently located above $96,000, which is around the current price of Bitcoin. This Bollinger Bands retest suggests that Bitcoin may be entering a new phase of upward momentum after recent corrections.
Historical resonance: The 86% rally of January 2024 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 monthly upper Bollinger Band preceded an 86% rally in Bitcoin’s price.
At the time, Bitcoin was trading near $46,000, which was brought forward from late 2023, following a strong price rally. However, a brief correction was seen in January, with Bitcoin price dropping to $40,000 to test the upper Bollinger Band. The test not only served as a launchpad for a sustained rally but also pushed Bitcoin to break its all-time high in March and surpass $70,000 for the first time in its history.
If Bitcoin were to repeat this 86% rally right now, it could rise to around $178,000, which Severino noted corresponds to the upper range of his target zone. In another analysisThe analyst predicted that Bitcoin could reach its market peak 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 current cryptocurrency is down 2.11% and 5.4% in the last 24 hours and seven days respectively.
This is the pullback led to the achievement of More than $5.72 billion in bitcoin profits, which added to short-term 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 its current reading of 45.
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However, there are reasons to believe that selling pressure may be easing. This is because the RSI level of 43 has served as an important support zone for Bitcoin since September. If this support holds, it could provide the foundation for Bitcoin’s move towards $178,000.
Featured image from ABC News, chart from TradingView
