Since January 8, Bitcoin has been trading above the $41,500 area. Although BTC sank to a low of $39,650 on January 19, the price immediately bounced back and formed a very long lower wick, which is considered a sign of buying pressure.
More importantly, the RSI and MACD indicators give strong bullish divergence signals (green lines). Such signals are very often harbingers of a vigorous price increase.
If a bullish move develops, the nearest resistance will meet the currency at $50,930 (Fibo level 0.382 correction and horizontal resistance).
A source: TradingView
Short-term dynamics of BTC
On the 6-hour chart, the BTC price made a bullish breakout of the descending resistance line and subsequently turned it into support (green icon).
After a short bounce, Bitcoin made a slightly lower low on January 19th. This was a test of strength as support for the $41,200 minor area.
In addition, the price is moving along another descending resistance line (dashed line), which is visible on shorter timeframes. Its bullish break could push BTC to $45,850 (0.5 Fib retracement and horizontal resistance).
And finally, on the 2-hour chart, Bitcoin is potentially trading inside a falling wedge, which is traditionally considered a bullish pattern. Now the market is approaching the border of this pattern, which has been present on the chart since January 13th.
As on the daily timeframe, the RSI is giving strong bullish divergence signals here, also supporting BTC’s chances of a bullish breakout.
Thus, strong price support and numerous bullish divergence signals suggest that a bullish breakout is the most likely scenario for the currency.
This also corresponds to the results of short-term wave analysis.
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