Analysis

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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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.