Bitcoin (BTC) indicators are showing several short-term bullish signals above an important support level. Thus, it is likely that the price exceeds its resistance.
Since January 8, the price of Bitcoin has been moving slightly above the $41,500 mark. Although it fell to a local low of $39,650 on January 10, it immediately rebounded and created a very long lower wick. This is a sign of strong buying pressure at this level.
More importantly, both the RSI and the MACD have generated considerable bearish divergences (green lines). These divergences are usually present before significant upward price movements.
In the event of a bullish move, the price is likely to encounter resistance at around $50,930. This objective corresponds to both the resistance of the Fibonacci retracement 0.382 as well as part of a horizontal resistance.
Short Term Bitcoin Movement
The six-hour chart shows that BTC broke above a descending resistance line and then validated it as support (green arrow).
After a brief rebound, BTC recorded a slightly lower low on January 19. This helped validate the $41,200 area as minor support.
BTC is also following another descending resistance line (dashed) in the shorter term. A move above it would likely show it all the way to $45,850. This objective corresponds to the resistance of the minor Fibonacci retracement 0.5 as well as a horizontal resistance.
Finally, the two-hour chart shows that BTC is potentially trading within a falling wedge, which is considered a bullish pattern. The price is currently approaching the end of this pattern, which has been in place since January 13th.
Similar to the daily data, the RSI has generated considerable bullish divergence, which supports the possibility of a breakout.
So, when taking into account the significant support just below the current price of Bitcoin, as well as the numerous bullish divergences, the most plausible scenario would be that it would eventually break above its resistance.
This also agrees with the short-term wave count.
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