Bitcoin Price Target of $178,000 Possible After Bollinger Band Retest
Bitcoin has been on a correction path 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 falling below $93,000.
The decline has led to Bitcoin retesting the Bollinger Bands, and technical analysis indicates a potential bounce towards a price target of around $178,000.
Bitcoin Retests Monthly Upper Bollinger Band
Crypto analyst Tony Severino noted the significance of Bitcoin's recent retest of the monthly upper Bollinger Band, which measures market volatility and potential reversal points. He highlighted that this pattern mirrors one observed in January 2024, which preceded a substantial rally.
The upper Bollinger Band is currently positioned just above $96,000, aligning with Bitcoin’s current trading price. This retest suggests a possible new phase of upward momentum following recent corrections.
Historical Echoes: January 2024's 86% Rally Offers A Blueprint
Severino compared the current price movement to Bitcoin's behavior in January 2024, when a similar retest of the monthly upper Bollinger Band preceded an 86% rally. During that time, Bitcoin was trading near $46,000 before dropping to $40,000 to test the upper Bollinger Band, which acted as a launchpad for a rally that broke its then all-time high, surpassing $70,000 in March.
If Bitcoin replicates the 86% rally, it could reach approximately $178,000, aligning with Severino's target zone. He predicted that Bitcoin might reach its market top as early as January 20, 2025.
Currently, Bitcoin is trading at $96,402, down by 2.11% in the past 24 hours and 5.4% over the last seven days. This pullback has resulted in over $5.72 billion in realized profits, increasing short-term selling pressure. The Relative Strength Index (RSI) has dropped from 69 on December 17 to 45 now.
Despite this, there are indications that selling pressure may be easing, as the RSI level of 43 has historically acted as a significant support zone for Bitcoin since September. If this support holds, it may facilitate Bitcoin's move towards $178,000.
Featured image from ABC News, chart from TradingView