Bitcoin’s Price Faces More Trouble: Bollinger Bands Signal Further Decline

Bitcoin (BTC) closed the week down 10.66%, failing to meet market expectations following the launch of the Strategic Bitcoin Reserve. While predicting BTC’s next move with certainty is impossible, technical indicators like Bollinger Bands provide valuable insights.

The Bollinger Bands, created by John Bollinger, help traders gauge whether an asset is overbought or oversold. On Bitcoin’s daily chart, the cryptocurrency is trapped between the middle and lower bands, with the lower band hovering above $80,411. This positioning makes BTC vulnerable to another 4% decline unless it swiftly reclaims the middle band at $90,200. An 8% surge in a few hours would be needed to reverse this trend, but such a move appears unlikely.

Zooming out to the weekly chart, the outlook is even more concerning. BTC remains stuck between the middle and lower bands, with the lower boundary positioned at $73,000. If Bitcoin continues its downward trajectory, it could face an additional 12.3% drop in the medium term.

The current technical setup signals heightened volatility and potential losses if buyers fail to step in at key support levels. While Bitcoin’s long-term fundamentals remain strong, traders should remain cautious in the short term, closely watching resistance and support levels for signs of a trend reversal.