Traders using the popular momentum indicator, Bollinger Bands, suggest that the price of Bitcoin (BTC) may experience further downside in the near future while still maintaining bullish momentum in the overall market. Bollinger Bands are a tool used in technical analysis to identify potential entry and exit points based on price volatility. Traders typically aim to buy when the price is near the lower band and sell when it approaches the upper band.
The increased daily volatility in Bitcoin’s price range indicates to traders that there is a likelihood of further downward movement. Crypto trader Aqua, with a following of 16,500, highlighted the expanding Bollinger band as an indicator of near-term price volatility. Aqua explained in an April 17 post that if the price closes below the support level, there could be a significant expansion to the $50,000 range.
Similarly, Stockmoney Lizards predicted a “continued correction” in a series of posts on April 17, despite the upcoming Bitcoin halving event on April 20. However, they reassured their followers that the long-term bullish momentum of the market remains intact. They emphasized that the current break in the bull market is just a temporary pause after a year-long upward trend.
Technical analyst Tony Severino suggested that Bitcoin’s price may experience significant volatility if the market cycle resembles that of 2017. In an April 16 post, he stated that the worst-case scenario, based on the Bollinger Band basis, could be $53,000.
Another pseudonymous crypto trader, Rekt Capital, emphasized the importance of Bitcoin maintaining its current support levels in order to avoid a breakdown that could lead to lows similar to the 18% pullback in March 2023.
According to trading resource Material Indicators, there is strong buy-side support forming around 5% below Bitcoin’s current price of $64,242. They noted that bid liquidity-based support is building in the $59,000-$61,000 range, with secondary support down to $50,000.
If Bitcoin’s price were to drop to the lower end of that range at $59,000, approximately $2.2 billion worth of long positions would be liquidated. Conversely, if Bitcoin’s price were to rise by just 1.15% to $65,000, $551 million in short positions would 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.