Bitcoin (BTC) is about to break out of a short-term bearish pattern, which may suggest the correction is over.
The daily chart shows that BTC is rebounding and challenging the descending resistance level that has existed since November 10th.
The rally was preceded by a significant bullish divergence in both the RSI and the MACD. This usually precedes an upward trend reversal and indicates that the price decline was not accompanied by a decrease in momentum.
Additionally, the RSI is just hovering above the 50 level while the MACD has produced seven consecutive bars of higher momentum. Both are seen as signs of an upward trend.
When a breakout occurs, the closest resistance is found between $ 55,500 and $ 58,750, the area formed by the 0.5-0.618 Fib resistance area.
BTC / USDT daily chart | Source: TradingView
The six-hour chart suggests a continuation on the upside.
BTC almost erupted above the descending parallel channel that has been forming since November 10th.
Such canals often contain corrective movements, which in most cases leads to an outbreak.
The upward movement was preceded by a clear bullish divergence in both the RSI and the MACD. It is even more pronounced than the daily time frame.
Hence, it is likely that BTC will continue to climb towards the $ 55,000- $ 58,700 resistance area.
BTC / USDT 6-hour chart | Source: TradingView
The wave number shows that over a period of 10 days, BTC completed a complex correction structure (marked in the graphic below).
If so, it is currently in wave Y, which is expected to rebound towards the resistance area described above.
When the W: Y wave has a 1: 1 ratio, which is common with such structures, BTC can hit a high of $ 55,513.
BTC / USDT 6-hour 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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