Bitcoin (BTC) is trading in the range of its December lows, but showing strong signs of a potential bullish reversal.
On December 23, BTC broke with a descending resistance line that had previously been in place from the record price on November 10. This indicates that the previous fix is now complete.
As a result, it fell back to pre-breakout levels near $ 46,000. This potentially created a double dip, which is often seen as a bullish reversal pattern.
On top of that, both the MACD and the RSI generated significant bullish divergences. This is a type of bullish event in which the fall in price is not accompanied by a similar decrease in selling momentum.
Previously, this divergence was the catalyst for very large bullish movements.
The closest resistance range is between $ 52,400 and $ 58,750 created by the Fib retracement resistance levels of 0.382-0.618.
Short term BTC range
The six-hour chart shows that since early December, BTC has been trading in a range between $ 46,300 and $ 51,800. It was recently rejected by the resistance zone on December 27 and has been declining since.
As of December 30, BTC has been trading inside the support level of the range. Similar to the daily schedule, a significant bullish divergence is developing in the RSI. As a result, an upward movement towards the midline of the range and potentially the highers of the range is expected.
Number of waves
The most likely wave count suggests BTC is still mired in a corrective pattern. It is currently trading just above the 0.618 Fib retracement support level which should help push the price up.
If W: Y waves have a 1: 1 ratio, which is common in such structures, BTC could hit a local high of $ 55,850. This peak would be reached within the resistance levels described above.
For BeInCrypto’s previous Bitcoin (BTC) analysis, click here.
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