Bitcoin Technical Analysis January 20th

Bitcoin (BTC) has again reached the resistance line of the short-term pattern. At the moment, a breakout seems the most likely scenario.

Descending Wedge

BTC has been trading within a descending wedge since Jan. 13. The descending wedge is generally considered a bullish pattern.

Up to this point it has made five escape attempts (red icon). As resistance levels weaken each time they are touched, a breakout of this pattern seems the most likely scenario.

In that case, the next resistance to watch is $43,500. This is a horizontal level that acts as intermittent support and resistance.

Future movement

Looking at the six-hour chart, Bitcoin broke the long-term descending resistance line before trading inside the descending wedge. Therefore, the current wedge can be viewed as a consolidation pattern after a breakout.

Furthermore, consolidation is taking place just above the $41,200 horizontal support area.

If Bitcoin can break above the wedge, next resistance will be found at $45,850. That target is the 0.5 Fib retracement resistance and horizontal resistance area.

Count waves

The short-term wave number supports the uptrend towards $45,950. This level also coincides with the resistance area outlined above.

However, it remains uncertain whether the current uptrend is part of an ABC corrective structure (black) or a new bullish impulse.

In the first case, Bitcoin can surge to $45,950 for wave A:C in a 1:1 ratio. This seems to be the minimum target for any up move. In the latter case, BTC can breach this target and head straight for $50,000.

The long-term numbers show that Bitcoin has completed the fourth wave and supports this short-term bullish move.

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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