Market

Bitcoin Technical Analysis January 25th

Bitcoin (BTC) staged a sharp recovery on Jan. 24 after falling to long-term support levels. Technical indicators are currently showing signs that the correction may be complete.

Ascending parallel canal

Bitcoin has been falling since hitting an all-time high on November 10, 2021. The move down eventually led to a break below the $40,800 horizontal support area, which is now believed to act as a resistance level.

The decline continued until Jan. 25 when Bitcoin hit a local low of $32,917. The price rallied shortly after (green icon) creating a bullish bar with a long wick below. This is seen as a sign of buying pressure.

Additionally, the bounce served to validate the ascending parallel channel support line that has been in place since April 2021.

BTC/USDT daily chart | Source: TradingView

Short term movement

The 2-hour chart shows the recent upward movement, which was initiated by bullish divergence in both the RSI and MACD. This is a development that usually results in a trend reversal to the upside.

After a bounce, Bitcoin hit a high of $37,550 before falling back down.

It is currently trading just above the 0.382 Fib retracement support at $35,800. The next supports are at $35,260 and $34,700. These targets are the 0.5 and 0.618 Fib retracement support levels, respectively.

One of these levels is expected to give BTC another boost.

BTC/USDT 2 hour chart | Source: TradingView

Count waves

The wave count shows that BTC has completed the ABC corrective structure that has been in development since April 2021. Waves are shown in black.

BTC/USDT daily chart | Source: TradingView

A closer look at sub-wave five shows that another bearish impulse is complete (red), further supporting this scenario.

While the number of alternative waves suggests another drop is possible, it still predicts a rally to test overhead resistances.

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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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.