Market

Bitcoin Technical Analysis January 7th

After breaking below the 32-day support area, Bitcoin (BTC) continued to decline, hitting a low of $ 41,000 on Jan. 7. It is currently testing an important horizontal support area.

Bitcoin has been falling since December 27, 2021. The decline hit a local low of $ 41,000 on Jan 7, just below 0.618 fib retracement support (white). This also caused BTC to hit a low in December 2021 (red line).

After touching this support, it rebounded somewhat and is currently trading at $ 42,200.

Bitcoin / USDT daily chart | Source: TradingView

Possible reversal?

Technical indicators on the daily timeframe give mixed signals.

The MACD, formed from the short and long-term moving averages (MAs), has created a bullish divergence. This means that the decline was not accompanied by a decrease in momentum – a signal that often heralds an upward trend reversal.

However, the RSI, a momentum indicator, is about to drop below 30 (red symbol). This is a bearish sign that the momentum is weakening.

BTC / USDT daily chart | Source: TradingView

Count waves

It looks like BTC is moving in a bearish impulse rather than a correction. This was due to the break of the aforementioned December 4th low (red line).

Wave five will likely last. In this case, the top Fib support levels are between $ 36,000 and $ 36,800. This area is the 1.61 (white) outer fib retracement level of wave four and gives the 1: 5 waves a 1: 1 ratio.

BTC / USDT daily 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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Annie

Championing positive change through finance, I've dedicated over eight years to sustainability and environmental journalism. My passion lies in uncovering companies that make a real difference in the world and guiding investors towards them. My expertise lies in navigating the world of sustainable investing, analyzing ESG (Environmental, Social, and Governance) criteria, and exploring the exciting field of impact investing. "Invest in a better future," I often say. That's the driving force behind my work at Coincu – to empower readers with knowledge and insights to make investment decisions that create a positive impact.

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