The Bitcoin price has increased considerably in the month of April, having done so by almost 20%. However, the price is approaching an important resistance level, which previously has been successful in reversing the trend.
While moving averages and the RSI are the most commonly used technical indicators for predicting the price, Bollinger Bands (BB) are not far behind. Cryptocurrency trader and technical analyst @Mesawine1 tweeted a Bitcoin price chart along with one indicator, the Bollinger Bands. He stated that the BTC price does not often reverse without touching the middle BB, which is currently at $8,000. Therefore, he is expecting the BTC price to reach $8,000 before possibly decreasing.
Weekly middle BB also near the 8k target.
How often has PA just turn mid flight without making it to the middle BB?
— Cryptotoad (@Mesawine1) April 7, 2020
Will the Bitcoin price be successful in reaching the target? If not, how high will it go? Continue reading below if you are interested in finding out.
On March 12, the Bitcoin price briefly decreased below the lower Bollinger Band before reversing its bearish trend. The price has been increasing since, having almost reached the middle band. The possible resistance from this band is further solidified since it coincides with the resistance area at $7,800.
Previously, the price has reached it twice from below; in January 2020 and October 2018. Both times, the price initially decreased after doing so, but in January it was eventually successful in moving above it.
The tweet states that the price very rarely decreases without even reaching the middle band. When looking at the price movement in 2018, this turns out to be true.
The price has moved from below toward this line four times. Three of those times, it has reached/surpassed this MA before decreasing. The only exception was on April 30, in which the rally ended 3% below the middle BB.
Therefore, this suggests that the price is likely to increase toward the middle BB at $7,800 and possibly move higher.
To conclude, the BTC price has been increasing over the past week. The likeliest place for the current move to end would be near $7,800, a confluence of both a resistance area and the middle BB.