Bitcoin (BTC) is showing signs of short-term bottoming and could confirm this by breaking through a descending parallel channel.
Bitcoin fell significantly on December 13th, falling to as low as $ 45,672.
Despite the decline, it is still trading above the 0.618 fib retracement support at $ 44,600. This level was confirmed as support during the December 4th rally, with a long wick underneath.
Technical indicators offer a mixed outlook.
The MACD, formed by the short and long-term moving averages (MAs), is in negative territory and is decreasing. This means that the short-term MA is falling faster than the long-term MA and is a sign of a downtrend. Although its histogram produced successively higher momentum bars on December 11th and 12th, it produced a lower bar (red symbol) on December 13th, potentially invalidating the possibility of a reversal.
However, the RSI has created a bullish divergence (green line). This occurs when the price decline is not accompanied by a decrease in momentum and is usually preceded by an upward trend reversal.
Hence, the daily timeframe offers a mixed outlook.
BTC / USDT daily chart | Source: TradingView
The six-hour chart shows that BTC has been trading in a descending parallel channel since it hit an all-time high in November.
Such canals often contain corrective movements, ie a breakout above the canal occurs in most cases.
Similar to the daily timeframe, both the RSI and the MACD create bullish divergences.
If BTC breaks above the channel, the next resistance will be found between $ 55,530 and $ 58,670. This is the area created by the 0.5-0.618 Fib resistance levels.
BTC / USDT 6-hour chart | Source: TradingView
The hourly chart shows that BTC has bounced off the 0.618 fib retracement support at $ 45,750.
Before that, it bounced off the 0.5 fib retracement support (green icon) on December 11th.
However, it fell again yesterday, hitting a slightly lower low at 0.618 Fib (green circle). This is the stage that usually ends the correction.
Hence, BTC could have hit a short-term low.
Hourly BTC / USDT Chart | Source: TradingView
You can see the BTC price here.
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Disclaimer: This article is for informational purposes only, not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.
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