Traders utilizing a popular momentum indicator suggest that the price of Bitcoin (BTC) may experience further downward movement in the near future while still maintaining its bullish momentum. Bollinger Bands, a technical analysis tool that utilizes price volatility to identify potential trading opportunities, indicate that traders aim to buy when the price is near the lower band and sell when it is near the upper band.
The increased daily volatility in Bitcoin’s price range suggests that it is primed for further decline, according to pseudonymous crypto trader Aqua. In a post on April 17, Aqua highlighted Bitcoin’s expanding Bollinger band as an indicator of near-term price volatility.
While the Bitcoin halving is set to occur on April 20, Stockmoney Lizards predicted a “continued correction” in a series of posts on April 17. However, they reassured that the market’s long-term bullish momentum remains intact, stating that the bull market is simply taking a break after a year of upward movement.
Technical analyst Tony Severino suggests that Bitcoin’s price could experience significant volatility if the market cycle mirrors that of 2017. In a post on April 16, Severino stated that the worst-case scenario would be a price of $53,000 based on the Bollinger Band basis.
Additionally, pseudonymous crypto trader Rekt Capital emphasized the importance of Bitcoin maintaining its current support levels to avoid a breakdown similar to the 18% pullback in March 2023.
According to trading resource Material Indicators, strong buy-side support is forming approximately 5% below Bitcoin’s current price of $64,242. The support is seen in the $59,000-$61,000 range, with secondary support extending down to $50,000.
If Bitcoin’s price drops to the lower end of that range at $59,000, approximately $2.2 billion worth of long positions will be liquidated, according to CoinGlass data. Conversely, if Bitcoin’s price increases by just 1.15% to $65,000, $551 million in short positions will be liquidated.
It is important to note that this article does not provide investment advice or recommendations. Readers should conduct their own research and analysis before making any investment or trading decisions.