Bitcoin (BTC) is in the process of reconfirming the short-term resistance line it broke out of earlier. If successful, the price can continue the uptrend towards $50,000.
After hitting a local high of $45,492 on Feb. 8, Bitcoin fell slightly the next day but still managed to create a small bullish real body.
The high was created very close to the 0.618 Fib retracement level at $44.880.
Despite the rejection, technical indicators are giving bullish signals. This is particularly evident with the RSI, which has moved above 50 (green circle).
The RSI is a momentum indicator and values above 50 are considered bullish. The last time the RSI rose above 50 was in early October (green circle) before starting an uptrend towards all-time highs.
BTC/USDT daily chart | Source: TradingView
Parallel Channel Breakout
The six-hour chart shows Bitcoin breaking out of a short-term ascending parallel channel. This is an indication that the bullish move is impulsive and likely to continue.
Moreover, the price twice confirmed this line as support. Therefore, the previous resistance line is expected to provide support.
BTC/USDT 6 hour chart | Source: TradingView
The most likely number of long-term waves shows that Bitcoin has bottomed out. There are two main possibilities for short-term numbers, both of which suggest that BTC is in wave 4 of a 5-wave bullish impulse (red).
The first scenario suggests that the price completes a pullback with wave 4. This means that at $41,900, BTC will fall towards the midline of the channel connecting waves 1-2 before initiating a move.
The number of partial waves is shown in black.
BTC/USDT 2 hour chart | Source: TradingView
The second possibility suggests that BTC completes a triangle that contains wave 4.
Hourly BTC/USDT 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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