Since reaching an all-time high of $108,135 on December 17, Bitcoin has been on a correction path. Notably, during this correction, the leading cryptocurrency has fallen by about 10% at the time of writing, even briefly dipping below $93,000.
This significant decline has led Bitcoin to retest the Bollinger Bands, with technical analysis indicating that Bitcoin will rebound to a target price of around $178,000 from now on.
Bitcoin retests the monthly upper Bollinger Band
Bitcoin's recent price adjustment has caught the attention of cryptocurrency analyst Tony Severino, who highlighted the key retest of the monthly Bollinger Band upper line. Severino shared his insights on social media platform X, emphasizing 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 ultimately led to a significant rebound after a similar retest.
According to the daily candlestick chart shared by Tony Severino, the upper Bollinger Band is currently above $96,000, close to Bitcoin's current price. This Bollinger Band retest suggests that Bitcoin may be entering a new upward phase after the recent adjustment.
Historical Echoes: The 86% rally in January 2024 provides a blueprint
Severino's analysis compares the current price trend with Bitcoin's price trend earlier in 2024. He noted that in January 2024, before Bitcoin's price increased by 86%, a similar retest of the monthly Bollinger Band upper limit occurred.
At that time, Bitcoin was trading close to $46,000, following a strong rise in price that began at the end of 2023. However, a brief pullback occurred in January, with Bitcoin's price dropping to $40,000, testing the upper Bollinger Band. This test not only served as a launch pad for the ongoing rise but also propelled Bitcoin to break its historical high in March, surpassing $70,000 for the first time ever.
If Bitcoin can replicate this 86% rally at this time, it could soar to around $178,000, Severino pointed out, aligning with the upper limit of his target range. In another analysis, this analyst predicted that Bitcoin could reach its market peak as early as January 20, 2025.
At the time of writing, Bitcoin's trading price is $96,402, still hovering above the Bollinger Band. Interestingly, the leading cryptocurrency has decreased by 2.11% and 5.4% over the past 24 hours and 7 days, respectively.
this pullback
causing
Bitcoin profits exceeded $5.72 billion, increasing short-term selling pressure. The impact of this pullback is evident in Bitcoin's Relative Strength Index (RSI), which has dropped sharply from 69 on December 17 to the current 45.
However, there is reason to believe that selling pressure may be easing. This is because the RSI level of 43 has been an important support area for Bitcoin since September. If this support level holds, it could lay the foundation for Bitcoin to move towards $178,000.
