Bitcoin (BTC) price has risen significantly since its January 10 low and is showing several signs that its corrective phase is complete.
BTC has been trading within a descending parallel channel since December 27. The movement within this channel led to a low of $39,650 on January 10th. That said, BTC then immediately rebounded and regained the December 4th low, located at the midline of the channel. This created a long lower wick, which is normally seen as a sign of buying pressure.
On January 13, BTC broke above the channel resistance line, confirming that the short-term correction has come to an end.
The nearest resistance zone, and which previously acted as support, is found at $45,850. This is the resistance level of the 0.5 Fibonacci retracement, as well as a horizontal support zone.
Reading indicators
The technical indicators for the daily time frame are showing bullish signs. This is particularly visible at the level of the MACD, whose histogram generated a very significant bullish divergence (green line). This is a sign that often precedes bullish moves.
In addition, the successive upper momentum bars (green arrow), as well as the bullish close of the price of BTC constitute a bullish reversal signal.
Bitcoin Wave Count Analysis
Long-term wave counting still presents several valid possibilities.
However, the short-term count suggests that the measurement of Bitcoin’s decline from its all-time high is over (in black). The subwave count is shown in red.
Due to BTC crossing above the channel and the deep retracement of the potential fourth subwave (red), it seems unlikely that the current rise is part of the fourth subwave.
Thus, the most likely scenario suggests that the correction is over and Bitcoin price bottomed out on January 10, this after the low at $39,558.
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