Bitcoin (BTC) rallied sharply on Feb. 7 and broke above its short-term pattern. This suggests that there is a possibility that the price has bottomed.

Morgenstern model

The weekly chart shows that Bitcoin rose significantly in the week of January 31st to February 7th and has continued this upward trend this week.

If Bitcoin is able to make a close above the current price, it will create a morning star that is commonly viewed as a bullish reversal pattern as the entire Jan. 17-24 decline is wiped out. Therefore, a weekly close above $43,070 is important for Bitcoin to complete this pattern.

BTC/USDT weekly chart | Source: TradingView

Daily movement

The daily chart is offering a bullish outlook as the MACD and RSI bullish indicators are both bullish.

The first indicator is in negative territory and the second has moved above the 50 level, both of which are signs of an uptrend.

BTC is currently approaching the 0.382 Fib retracement resistance at $46,712.

BTC/USDT daily chart | Source: TradingView

Additionally, BTC broke an ascending parallel channel on the six-hour chart. This is a sign that the upside is impulsive and could lead to new local highs in the near term.

BTC/USDT 6 hour chart | Source: TradingView

Count waves

Due to the continued increase, the number of long-term waves seems to signal a bottom formation.

As for the short-term wave count, BTC has likely completed or almost completed the third wave (red) of a five-wave bullish pulse. The number of partial waves is shown in black.

The February 8 high of $45,492 was created at the confluence of Fib levels, namely a 1:1.61 ratio of wave 1:3 (red) and a length of 0.618 of partial wave 1-3 (black).

So, it is possible for BTC to retest the channel’s resistance line before resuming its uptrend.

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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