Bitcoin

Bitcoin (BTC) Rebounds After Rejecting Resistance at $44,200, What Next?

Bitcoin (BTC) was rejected from the $44,200 resistance area on Jan 13 and is currently attempting to find support.

Parallel channel breakout and retest

On Jan. 12, Bitcoin broke out above a descending parallel channel previously in place since Dec. 27. This is a sign that the correction is over.

It continued to climb until it hit a high of $44,500 on January 13th. The high was set right at the 0.382 Fib retracement resistance as the previous bearish move was measured.

Despite a stronger resistance at $45,800, Bitcoin failed to reach it.

After the rejection, Bitcoin declined and has now returned to the $42,100 region that previously acted as resistance. This zone should now act as a support.

BTC/USDT 6 hour chart | Source: TradingView

future movement

The two-hour chart shows Bitcoin trading between the 0.382 – 0.5 Fib retracement support levels at $42,100 – $42,650. This is a strong support area and could trigger a bounce.

There is lower support at $41,500, 0.618 Fib retracement support, also horizontal support area.

BTC/USDT 2 hour chart | Source: TradingView

However, the daily chart is offering mixed signals. While the MACD has been generating successively higher momentum bars, a potential bullish reversal signal, Bitcoin has generated a bearish engulfing candle.

Therefore, while the technical indicators are bullish, the price action is bearish and fails to create consensus on the direction of the trend.

BTC/USDT daily chart | Source: TradingView

Count waves

There are two main possibilities for the long-term wave count, both of which suggest that BTC will rally in the near-term.

The first suggests that BTC has been correcting within a WXY corrective pattern (red) since hitting an all-time high of $69,000 on Nov. 10. The number of subwaves is drawn in black.

On this possibility, the price will rally in the short term and head towards $45,000-$48,000, completing sub-wave B before another decline completes the entire correction.

BTC/USDT daily chart | Source: TradingView

The number of substitutions also shows that BTC has corrected since its all-time high on Nov. 10. However, the entire correction has taken place after an ABC structure (red) where wave A has just completed.

As a result, the upside potential will be more significant, potentially reaching highs near $55,000 before another drop.

BTC/USDT daily chart | Source: TradingView

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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