Bitcoin has experienced a notable correction phase since reaching a new all-time high of $108,135 on December 17. This correction has resulted in a decline of approximately 10%, with Bitcoin briefly dipping below the $93,000 mark.
Understanding Bitcoin’s Technical Signals
This significant decline has prompted Bitcoin to retest the Bollinger Bands, with technical analysis indicating a possible rebound towards a price target of $178,000.
Bitcoin Retests Monthly Upper Bollinger Band
Bitcoin’s recent price correction has garnered the attention of crypto analyst Tony Severino, who has highlighted a critical retest of the monthly upper Bollinger Band. Through his analysis on the social media platform X, Severino underscored the importance of this technical indicator, which gauges market volatility and potential reversal points.
Severino pointed out that this development mirrors a similar pattern observed in January 2024, which led to a significant rally post-retest. According to the daily candlestick chart shared by him, the upper Bollinger Band is currently positioned just above $96,000, aligning with Bitcoin’s current price. This retest suggests a potential phase of upward momentum following recent corrections.
Historical Echoes: January 2024’s 86% Rally as a Blueprint
Severino’s analysis draws parallels between the current price movement and Bitcoin’s behavior at the beginning of 2024. In January of that year, a similar Bollinger Band retest preceded an 86% rally in Bitcoin’s price.
At that time, Bitcoin was trading near $46,000, riding the wave of a strong rally initiated in late 2023. However, January saw a brief correction, with Bitcoin’s price dipping to $40,000 to test the upper Bollinger Band. This acted as a springboard for further price increases, allowing Bitcoin to break its previous all-time high and exceed $70,000 by March.
If Bitcoin were to replicate this 86% rally now, it could potentially reach around $178,000, aligning with Severino’s target zone. In an additional analysis, Severino predicted Bitcoin might hit its market peak as early as January 20, 2025.
Currently, Bitcoin is trading at $96,402, hovering near the upper Bollinger Band. Despite being down by 2.11% and 5.4% over the past 24 hours and seven days, respectively, this pullback has resulted in the realization of over $5.72 billion in Bitcoin profits, contributing to short-term selling pressure.
The impact of this correction is also reflected in Bitcoin’s Relative Strength Index (RSI), which has dropped sharply from 69 on December 17 to its current reading of 45.
Anticipating the Future: Will Bitcoin’s Selling Pressure Ease?
Despite the current selling pressure, there is optimism that it may soon ease. This optimism is based on the RSI level of 43, which has historically served as a crucial support zone for Bitcoin since September. If this support holds, it could pave the way for Bitcoin’s ascent towards $178,000.
