Bitcoin (BTC) price fell below a local low of $ 39,620 on January 10 before rebounding to a high of $ 42,627. This could further validate the $ 42,000 area as support.
On January 10, Bitcoin’s price created a lower long wick pattern and rebounded. Drill bits are often seen as signs of buying pressure. This specific bit appeared just at the horizontal area of $ 41,000, validating it once again as support. This support zone has been in place since August 2021. In order for the bullish structure of BTC to remain intact, it is imperative that the price remains above this zone.
Technical indicators remain bearish, but the RSI has moved above 30 (green arrow). The RSI is an indicator of momentum, or momentum, and while readings below 50 are still considered bearish, the rise above 30 is a partially bullish sign.
Bitcoin evolves in a descending channel
The six hour chart shows that BTC is trading within a descending parallel channel. This is generally considered to be a corrective pattern, which means that one would expect price to eventually breach the channel.
In this case, the closest resistance zone would be at $ 45,900. This target is the resistance of the 0.5 Fibonacci retracement level.
Technical indicators are also showing bullish signs.
The MACD and RSI are both up, and the MACD is practically positive.
Finally, the price of Bitcoin regained the low of December 4 (red line) after having deviated slightly below it. This is another bullish development, and often leads to upward movements.
Wave count analysis
While the long-term wave count remains uncertain, the short-term pattern suggests that BTC has completed a downward move in five waves (black).
The sub-wave count is shown in red, and it looks like Bitcoin has either finalized its decline or is in the fifth and final sub-wave.
In the event of a possible extension of this sub-wave, in which waves 1 and 5 show a 1: 1 ratio, BTC would drop to $ 36,450 before rebounding.
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