Bitcoin (BTC) is showing some bullish signs in the lower timeframes and could break above its consolidation pattern soon.
Although BTC broke below the long-term ascending support line on December 4th, it has gradually moved upward since then. The rally came straight from the 0.618 fib retracement support at $ 44,150, adding to its importance and confirming this zone as support.
In addition, technical indicators give bullish signals. Both RSI and MACD generate bullish divergences (green line). This shows that the price decline was not accompanied by a decrease in momentum – a signal that often heralds a bullish reversal.
Thus, the daily chart shows that BTC is ready to initiate a potential rally.
BTC / USDT daily chart | Source: TradingView
The six-hour chart shows that BTC has been trading in a descending channel since it hit an all-time high of $ 69,000 on November 10th. It is currently trading just above the channel’s centerline.
More importantly, both the RSI and the MACD create bullish divergences. This signal is similar to the daily time frame, except that the divergence is even more pronounced.
If there is a breakout, the next resistance is at $ 55,500 – $ 58,680. This zone is the 0.5-0.618 fib retracement resistance area.
BTC / USDT 6-hour chart | Source: TradingView
The hourly chart shows that BTC is about to break out on another descending parallel channel.
More importantly, it hit a higher low on the $ 45,810 support on December 14th. This is both the .618 fib retracement support and the channel support.
With price currently in the upper part of the channel, the likely scenario is a breakout above the channel.
Hourly BTC / USDT Chart | Source: TradingView
Long-term numbers show that BTC corrects itself within a major wave B.
If so, then BTC is currently in sub-wave C, potentially leading to a breakout above the patterns described above.
When the A: C subwave has a 1: 1 ratio, which is common with such patterns, BTC can hit highs near $ 56,000. This level is within the aforementioned resistance range.
BTC / USDT 2-hour chart | Source: TradingView
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