Bitcoin (BTC) has likely completed a correction with a breakout across the medium and short-term pattern.
BTC has been stuck below a descending resistance line since hitting an all-time high in November.
Between December 4th and 19th, both the RSI and the MACD produced significant bullish divergences (green line). This is a bullish sign that often precedes a trend reversal as it means the price decline has not been accompanied by a decrease in momentum.
After completing the bullish divergence, BTC initiated an upward move and broke the descending resistance line in December.
The closest resistance is between $ 55,500 and $ 58,700. This target area is created by the 0.5-0.618 Fib resistance range.
BTC / USDT daily chart | Source: TradingView
The two-hour chart shows that BTC is breaking over a short-term descending parallel channel that has existed since December 7th. This is another sign that the correction phase is complete.
Currently, the closest resistance is at $ 50,600. If BTC breaks this level, it will likely accelerate towards the resistance area described above.
BTC / USDT 6-hour chart | Source: TradingView
The short-term wave count shows that BTC has completed a complex corrective structure (highlighted) and is currently recovering.
If the W: Y wave is 1: 1, which is common with such corrections, the BTC-THFI can hit a high of $ 55,500, which is in line with the resistance area outlined above.
BTC / USDT 2-hour chart | Source: TradingView
In the long term, it is still uncertain whether the current upward movement is wave B (black). If so, BTC will have one more drop to complete wave C.
The price reaction to the spike of wave B will help determine the direction of the long-term trend.
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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