Will Bitcoin Drop Further? Bitcoin Technical Analysis
From the end of May 2021, Bitcoin has traveled in a range that goes from 23.6% to 61.8% Fibonacci level, that is, from the zone around $40,000 to around $30,500.
Historically, Bitcoin has suffered retracements of at least 80%, and it may happen again this time.
From a volume perspective, we can see a struggle between bulls and bears, but bulls are not strong enough to break the resistance level and the upper Bollinger band. In fact, so far there are no signs that can absolutely confirm that bears have definitely lost their strength.
TradingView - BTC/USD Binance
The Bollinger bands are narrowing, showing decreasing volatility.
This could be a good sign for bulls, because it might mean that the market is ready for a new long-term rise. But a rise must be confirmed by a sharp rise in volume, something we’re not witnessing.
On the other hand, we are witnessing a rise, but a volume-price divergence is in place.
For this reason it is very likely that Bitcoin will have a final sharp correction, and a possible target is in the zone between $20,000 and $17,900.
Of course, the trend will positively reverse in case of bullish volume.
This article doesn’t represent financial advice: always do your own research before investing!