Market

Bitcoin Technical Analysis January 21st

Bitcoin (BTC) hit a new 2022 low on Jan. 20 at $38,250. Although it is still trading in a strong support area, there are no signs of a bullish trend reversal yet.

New year low

Bitcoin has been falling since hitting an all-time high of $69,000 on November 10, 2021. Although the price initially recovered on January 10th, it failed to sustain its uptrend and fell below $40,000 on January 21st. BTC has hit a local low of $38,250 so far.

Technical indicators show that the downtrend is in its final stages. The first sign of this was volume (red icon), which was below average as Bitcoin price hit a new yearly low.

The second signal can be seen in the daily RSI, which has fallen below 30. The RSI is a momentum indicator and levels below 30 are generally considered oversold.

The last time the RSI was in the oversold territory was in May when the Bitcoin price was close to $30,000. Then there was a clear upward movement.

BTC/USDT daily chart | Source: TradingView

Support level

So far, Bitcoin is down 43.7% from its all-time high. Such dramatic drops without a recovery are unusual for BTC.

Furthermore, the price is trading just above the $38,000 horizontal support area, which coincides with the 0.786 FIb retracement level at $37,450.

BTC/USDT daily chart | Source: TradingView

Future movement

The move down from the high appears to have formed a five-wave correction. If so, BTC currently appears to be in the fifth wave of this decline (black).

The area most likely to act as a bottom is between $35,000 and $35,800. This range was found using the external Fib retracement resistance level of 1.61 (black) on wave four and the length of 0.618 of waves 1-3 (white).

BTC/USDT 12 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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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.