Bitcoin In Turbulence: Will The Price Go Up After Falling Below $11,400?
Bitcoin’s sharp drawdown below the critical support level of $11,400 has shaken traders’ confidence in the technical strength of the bulls. Will Bitcoin continue to increase, or bears have come to the crypto market for a long time?
Bitcoin is on the verge of the lower Bollinger bands
Yesterday, August 26, Bitcoin price plummeted to $11,107, leaving weekly support levels behind. This situation has seriously alarmed the crypto market and cast doubt on traders’ predictions about the rapid growth of the flagship cryptocurrency in early September. But Bitcoin was able to rebound from this level and closed the 24-hour timeframe with a price of $11,400.
In the current technical chart, the BTC/USD pair is within the Bollinger Bands. This indicator determines the behavior of the price of a crypto-asset depending on the nature of the deviation from the moving average lines. Thus, if the cryptocurrency has signs of increasing volatility, deviations from the moving average line will be higher, and a wide corridor will form on the chart. During this period, the price of a crypto asset is quite sensitive to changes and may slide to lower support levels.
Bitcoin’s rebound yesterday from the $11,107 level allowed it to bounce off the lower Bollinger band and close the daily chart with the hope of a return of bullish momentum. The current behavior of the flagship crypto commented by the creator of this indicator, technical analyst John Bollinger. He is convinced that Bitcoin will be able to rise above the moving average and catch an uptrend wave if several conditions are met.
Does Bitcoin have a chance to turn up?
John Bollinger rates Bitcoin’s rebound above $11,107 as a chance for a continuation of the bullish trend. In case the flagship cryptocurrency fell below the Bollinger Bands range, the situation would be as critical as possible due to bearish pressure.
The analyst clarified that to fix the price, the crypto asset must test twice, either the upper or lower band of the indicator. Looking at Bitcoin’s behavior since the beginning of August, it is clear that the crypto asset has already tested the upper range of Bollinger Bands twice in an attempt to storm the level above $ 12,000. As such, likely, Bitcoin may soon test the lower range of the Bollinger Bands again.
If the bears turn out to be weak, Bitcoin has a chance to return to the moving average and bounce into the upper corridor of Bollinger bands. A logical continuation of this cycle will be the phase of BTC price consolidation with subsequent growth. The analyst suggested that under this scenario, the Bitcoin price could break above $12,000 and move towards a new high of $15,000.