Bitcoin Technical Analysis January 24th
Bitcoin (BTC) has been falling since Nov. 10 and is nearing a 2021 low. Despite indicators showing extreme oversold levels, there are no signs of a bullish reversal in sight just yet.
Main support level
Bitcoin fell significantly over the week of January 17-24, falling 21.5% at one point from highest to lowest prices. The entire range of movement fluctuates between $34,000 and $43,500.
Due to the presence of multiple wicks, it is currently not possible to pinpoint key support levels. However, the two most likely support zones seem to be located at $35,200 and $32,000.
At the time of writing, Bitcoin is trading within the first zone.
Technical indicators on the daily time frame have not shown any signs of reversing such as: B. A bullish divergence.
However, the RSI hit a low of 20 on Jan 22. The RSI is a momentum indicator and levels below 30 are considered oversold, while a level of 20 is considered extremely oversold. This level is even lower than that of May 2021, when BTC bottomed out around $30,000.
Furthermore, this level is also very close to that of March 2020 (red circle) when BTC bottomed at $3,300. Therefore, according to this indicator, BTC is very close to the bottom.
The MACD also provides a similar value, which is an indicator constructed from the short-term and long-term moving averages (MAs). The MACD has been in the negative 71-day range and continues to fall. This means that the short-term MA moves slower than the long-term MA.
As of 2019, the longest periods that the MACD has been in negative territory were 69, 50, 84, and 71 days respectively (marked on the chart below).
Therefore, the current period is the second longest period that the MACD has been in negative territory, just behind the April-June 2021 period.
BTC/USDT daily chart | Source: TradingView
Short term volatility
The two-hour chart shows BTC trading in an ascending parallel channel since Jan. 22. Such channels often contain corrective moves, which means that a break below the channel should occur in most cases.
In this case, the next support can be found at $32,500. This target is the external Fib retracement level of 1.61 when measuring the height of the channel.
This level also coincides with the long-term support area outlined above near $32,000.
BTC/USDT 2 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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