Bitcoin (BTC) indicators are showing some short-term bullish signals as it trades above strong support. This makes a break above resistance the most likely scenario.
As of Jan. 8, Bitcoin is trading just above $41,500. Despite slipping to a local low of $39,650 on Jan. 10, it immediately rallied, generating a very long lower wick. This shows that the buying pressure is enormous at this level.
More importantly, both the RSI and MACD produced significant bullish divergences (green line). These divergences often occur before significant upside moves.
If there is an upward move, the price is likely to rally to the resistance around $50,930. This target is both the 0.382 Fib retracement resistance level and the horizontal resistance area.
BTC/USDT daily chart | Source: TradingView
The six-hour chart shows Bitcoin breaking above a descending resistance line and subsequently confirming it as support (green symbol).
Bitcoin is also moving along another short-term descending resistance line (dashed line). A break above this is likely to send the price higher to $45,850. That target is the minor Fib retracement resistance of 0.5 and the horizontal resistance area.
BTC/USDT 6 hour chart | Source: TradingView
Finally, the two-hour chart shows that BTC is likely trading within a descending wedge that has been in place since Jan. 13. This is a bullish pattern and BTC is currently nearing its end.
Similar to the daily time frame, the RSI has generated significant bullish divergence, which supports the possibility of a breakout.
Considering the strong support area just below the current price and the many bullish divergences, an eventual breakout looks like the most likely scenario.
This also agrees with short term wave counts.
BTC/USDT 6 hour 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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