Bitcoin Technical Analysis February 2nd

Bitcoin (BTC) has been on the rise since Jan. 24 and has now reached the long-term descending resistance line. A final breakout above this line is expected.

Ascending parallel canal

Bitcoin has been trading within an ascending parallel channel since April 2021.

Currently, Bitcoin is trading just below the descending resistance line that has been forming since the all-time high of $69,000 on November 20, 2021. Hence, there is a strong resistance just above the current price.

BTC/USDT daily chart | Source: TradingView

Future movement

Readings of the daily MACD suggest that Bitcoin is in an accumulation phase ahead of a significant surge. This is mainly because the daily MACD was in the negative 81-day zone. This is the second longest period that the MACD has been in negative territory in the last four years, just behind the period from March to June 2021, when the MACD was negative for 83 days. This signal is very similar to that of the RSI.

BTC/USDT daily chart | Source: TradingView

This six-hour chart shows that this is the bulls’ third breakout attempt (red symbols). As resistance lines weaken with each test, a final breakout above this line is expected.

In this case, the 0.382 Fibonacci retracement resistance at $46,763 is the first target, while the 0.5 Fib level at $51,000 is the next target. So, once this line is conquered, there is likely to be a significant move higher.

BTC/USDT 6 hour chart | Source: TradingView

Count waves

There are two possible scenarios for short-term wave counts.

The first is that Bitcoin is completing an initial crossover wave that formed from the Jan. 24 low and is currently in wave four. Such diagonal waves are usually in the form of an ascending wedge.

The most likely number of long-term waves indicates that a bottom has been reached. Creating that first crossover will go a long way in showing that that specific number of waves will come into play.

BTC/USDT 2 hour chart | Source: TradingView

The number of alternating short-term waves suggests that the current pattern is part of an irregular flat corrective structure. In that case, Bitcoin could drop to $35,000 before resuming its bullish momentum.

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.