U.Today - Major cryptocurrency Bitcoin (BTC) may be on the verge of a substantial price collapse, according to popular technical analysis indicator Bollinger Bands.
Represented by the 20-day moving average and deviations out of it - one up and one down - the indicator forms a sort of price range in which investors can estimate what the current bias for the asset is, - if it is oversold or overbought.
And for Bitcoin, the Bollinger Bands paint quite a grim picture.
Following all the price perturbations of late, the price of the biggest cryptocurrency found itself under the middle band on the daily price chart. It is all simple now for BTC to be honest; if the daily candle closes there, then the possibility of the price falling to a lower band increases.
This may mean an almost 7% downward movement from current levels, right below $78,000 for Bitcoin.
Bitcoin (BTC) price scenarios
If the price of the leading cryptocurrency manages to pull above the 20-day moving average, it will be a powerful signal about the bullish intentions of traders regarding BTC and will change the bias for Bitcoin to reach the upper band. That one is currently at $92,150 - up almost 10%.But let’s not get ahead of ourselves because, as history often teaches, price movements rarely happen in isolation, and a single indicator never tells the full story. There are market sentiment, macroeconomic context and liquidity levels.
Short squeezes, unexpected news catalysts or even a sudden surge in retail buying could push Bitcoin back above the middle band, invalidating the bearish outlook entirely.
And yet, if BTC does slide below that lower band, well, it would not be the first time the market witnessed an aggressive downturn that sent leveraged traders scrambling to cover their positions. A cascade of liquidations? Not out of the question.