Bitcoin (BTC) is in the process of confirming previous resistance levels as support in both the short and medium term.

Long term resistance line

BTC has fallen along with a descending resistance line since hitting an all-time high on November 10th. The decline lasted through December 4th, dropping to a low of $ 42,000.

After the low, both the RSI and the MACD produced a bullish divergence (green line) over a period of 15 days. This is a bullish development that usually precedes an upward trend reversal.

On December 21st, BTC broke the resistance line and is currently in the process of confirming it as support (green symbol).

The closest resistance range is between $ 55,500 and $ 58,700. This target area is created by the 0.5-0.618 Fib resistance levels.

BTC / USDT daily chart | Source: TradingView

Eruption on the canal

The two-hour chart shows BTC breaking over a descending parallel channel that has been in existence since December 7th.

It is currently in the process of confirming the channel’s resistance line as support (green icon).

This line also coincides with the previous resistance area at $ 48,100 which is now intended to serve as support.

The coincidence of horizontal and diagonal planes increases the strength of this zone.

BTC / USDT 2-hour chart | Source: TradingView

Count waves

Short-term numbers show that BTC has just completed a complex correction structure (highlighted) with wave X (pink).

If so, then it is currently in wave Y and counting. If it has a 1: 1 ratio on Wave W, it will take BTC to a high of $ 55,400. This concludes a longer-term wave B.

With wave W short-lived, an upward move to $ 55,400 is expected to begin soon.

BTC / USDT 2-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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