Bitcoin sank significantly on January 27. The price formed a double bottom and bounced off the $ 29,000 support.
Bitcoin is expected to resume gains towards the $ 33,800 resistance area or even move higher.
Bitcoin bounced off support
Bitcoin (BTC) rebounded from the $ 33,800 resistance area on January 25 and began to decline, accelerating its decline on January 27. The price reached a low of $ 29,241 and bounced off it.
The $ 29,000 level is extremely important as it represents the 0.5 Fibo level of the retracement of the entire bullish move. Bitcoin formed long bottom wicks each time it tested this mark. However, each time the next wicks and subsequent rebounds became weaker and weaker. This indicates impulse fading.
In this regard, today’s closing price becomes especially important. A weak rebound, which cannot absorb yesterday’s candle, will be a pronounced signal that prices are weakening. If the BTC rate moves higher, the nearest area of resistance will meet it at $ 33,800 and $ 36,950.
However, technical indicators on the daily chart suggest that the trend remains bearish.
Double base
A potential double bottom can be seen in the 6 hours chart, which is accompanied by bullish divergence signals on the RSI and MACD.
The first bottom is characterized by a bullish hammer and the second is a bullish engulfing candle. Both of these signals are bullish.
Indicators of this timeframe support the probability of a rebound.
The same can be said about the situation on the 2-hour timeframe.
BTC has made a bullish breakout of the downtrend resistance line and is now trying to turn it into support, along with the $ 31,000 horizontal support area.
The MACD indicator is almost in the green zone. In this regard, the BTC rate may continue to rise in the direction of $ 33,800 and, possibly, $ 36,900.
Wave analysis
The wave analysis results suggest that Bitcoin is in wave C of the ABC retracement (orange), which could end in the $ 39 150- $ 40 108 range.
Sub-wave analysis (black) of wave C suggests that we are dealing with a leading diagonal, which may end at $ 39,276, which is in line with the longer-term forecast.
However, this is a very short-term timeframe, so it is highly speculative. Unlike the forecasts marked in black on the chart, the price reaching the $ 39 150- $ 40 108 range seems more likely.
Conclusion
Thus, the bitcoin rate is expected to rebound and reach the resistance area of $ 33,800. Potentially, the pair can break it and head towards the target range of $ 39,150- $ 40,108.
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
