The fall back below $60,000 has with it also taken the coin below a critical life-saving support level that’s been untouched since late 2020.
Bitcoin Loses Life-Saving Support Level, First Time Since 2020
Bitcoin and other cryptocurrencies are notorious for their volatility, but that’s also how they’re able to generate life-changing wealth for early investors.
Because of how volatile the emerging speculative asset class is, volatility measuring tools like the Bollinger Bands are especially effective. When the bands tighten is says that price action has been sideways and a major move is coming.
If any coins close a candle outside of the bands with volume, there’s often an opportunity to “ride the bands” to incredible gains.
That’s exactly what happened that took Bitcoin from under $12,000 to more than $64,000 in a matter of months. The Bollinger Bands got tight, began to expand, and because the top cryptocurrency was above the middle-SMA, the bull market was cleared for takeoff.
The problem is, that same signal is back but in reverse.
According to the tool, what’s about to go down could be Bitcoin price. Passing through the mid-BB can be used as an effective buy or sell signal. After several candle closes below the SMA, a fall to the lower Bollinger Band is the most likely next target.
That target is around $46,000 per BTC, at the height of the “Elon Musk” candle.
Either that holds strong, or there’s a chance the bull market is over. The only line left for bulls to keep hope alive, would be the same middle-SMA on the monthly timeframes.
The middle-SMA in the monthly is right around $18,000 per coin and below the cryptocurrency’s former all-time high. A fall of that magnitude would be a frightening 70% drop, comparable to the fall from June 2019 to Black Thursday last year.