The weekends are known for being extremely active, displaying high-intensity trades that flip the market’s prevailing trend to a large extent. Unfortunately, the past week’s close remained largely consolidated with a bearish close. The Bitcoin price also experienced a similar price action as it failed to surpass and secure the levels above the crucial resistance at the moment at $29,500, which may compress the price to a large extent in the coming days.
The year 2023 began with a huge recovery, as the token not only gained a huge upswing but also attracted massive volume. However, the price variations were pretty low comparatively, indicating both bulls and bears held equal dominance. Presently, the BTC price has approached a crucial juncture, which may either propel the price close to $40,000 or drag it below $20,000.
Bollinger bands are a type of statistical chart that suggests whether the markets could be either overbought or oversold. These bands tend to compress and relax as per market trends. If the bands swell out, then the prices are in motion either towards the north or south. If the bands maintain a parallel trend, it indicates that crypto prices are maintaining a stagnant trend. However, if the bands get squeezed, it indicates the markets are closer to displaying extreme price action regardless of the direction.
Presently, the price has encountered a similar situation wherein the possibility of a bearish breakout appears to be higher. Previously, during 2019 and 2020, before the beginning of the 2021 bull run, a similar squeeze was witnessed. But the prices had rebounded from the lower support of the bands which propelled the prices higher. However, in the current scenario, the BTC price faced an interim rejection from the upper resistance of the bands, due to which the possibility of a bearish pullback looms over the space.
Therefore, if the trade executes as per the speculation, the Bitcoin (BTC) price seems to be at the foothill of a major fallout.
