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bitcoin has been on a path of correction since reaching a new all-time high of $108,135 on December 17. Notably, this correction has seen the leading cryptocurrency decline by around 10% as of this writing and even breaking below $93,000 very quickly.
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This notable drop has seen bitcoin retest the Bollinger Bands, and technical analysis suggests a bounce from here to reach a price target of around $178,000.
bitcoin Retests Upper Monthly Bollinger Band
bitcoin <a target="_blank" href="https://bitcoinist.com/bitcoin-price-corrections-are-not-important/” target=”_blank” rel=”nofollow”>recent price correction has caught the attention of cryptanalyst Tony Severino, who highlighted a critical retest of the monthly upper Bollinger Band. <a target="_blank" href="https://x.com/tonythebullBTC/status/1870204085250498607″ target=”_blank” rel=”nofollow”>Sharing your ideas On the x social media platform, Severino highlighted the importance of this technical indicator, which measures market volatility and possible reversal points.
According to him, this development reflects a similar pattern observed in January 2024, which ultimately led to a substantial rally after a similar retest.
According to the 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. This retest of the Bollinger Band suggests that bitcoin could be entering a new phase of bullish momentum after recent corrections.
Historical echoes: January 2024 86% rally offers a plan
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 price. of bitcoin.
At the time, bitcoin was trading near $46,000, following a strong price rally since late 2023. However, a brief correction occurred in January, with bitcoin price falling to $40,000 to test the Bollinger Band superior. This test acted 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 were to replicate this 86% rally at this point, it could shoot up to around $178,000, which Severino says is aligning with the upper range of his target zone.<a target="_blank" href="https://x.com/tonythebullBTC/status/1865791239851069529″ target=”_blank” rel=”nofollow”> In another analysisThe analyst predicted that bitcoin could peak in the market 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 leading cryptocurrency is currently down 2.11% and 5.4% in the last 24 hours and seven days, respectively.
This setback has<a target="_blank" href="https://x.com/ali_charts/status/1870545271496626622″ target=”_blank” rel=”nofollow”> led to the realization of over $5.72 billion in bitcoin gains, which has 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 acted as a major support zone for bitcoin since September. If this support holds, it could set the stage for bitcoin to advance towards $178,000.
Featured image from ABC News, chart from TradingView
