By Franklin Smith
Briefly –
- Bitcoin trades within an ascending channel.
- Vital resistance zones stand around $38.7K and $40.8K.
- Bitcoin broke out of a near-term symmetrical triangle.
Bitcoin (BTC) shows massive bullish signs in a 24-hour timeframe, but crypto is yet to overcome near-term horizontal resistance zones.
Bitcoin saw a slight increase in the 23 January to 30 January week, forming a small bullish candle that stayed within last week’s bearish candlestick. For now, the MACD and RSI appear to fall. The momentum indicator Relative Strength Index dropped beneath 50-level, revealing a bearish outlook.
Nevertheless, the last time this indicator declined beneath this mark, it only led to a deviation before continuing the upside movement. Overall, the weekly chart paints a somewhat bearish picture for BTC.
Current Trading Setup
Bitcoin has traded within a climbing channel since 13 April 2021. That is according to the daily price chart. On 24 January 2022, the currency bounced off the channel’s support line, forming a long wick, signaling buying momentum. Bitcoin has moved up since.
For now, Bitcoin’s nearest resistance level locates at $40.8K, a vital zone that has had served as previous support.
The daily Relative Strength Index offers an impressive bullish gesture as the indicator moved beyond the oversold reading of 30. Previously, it had plunged under 30 before regaining the area two times:
- 2020 March – preceding a nearly 1,000% upward move.
- 2021 May – preceding a 122% upside move.
Therefore, this means a bullish signal that historically transpired close around noteworthy price bottoms.
Near-term Bitcoin Movement
The 6-hour chart indicates Bitcoin trading within the minor resistance at $38,700. The level acts as the 0.5 FIB retracement and horizontal resistance levels. Meanwhile, the coin attempts a breakout after the failed trial on 27 January.
The 2hr chart indicates BTC already broke out of a symmetrical triangle and is prepared to validate the level as support. Reclaiming the previously mentioned resistance at $37,800 will reveal the primary target between $40,000 and $40,300.
The target emerges from using 0.618 extensions of the previous upside move and 0.618 Fibonacci retracement resistance. If BTC moves past this level, it will head towards the value area of $42,500.
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