On January 20, the price of Bitcoin (BTC) hit a new low of $38,250. Although it is still moving at an area of considerable support, there are no signs of a bullish reversal yet.
The price of BTC has been in decline since its all-time high of $69,000 on November 10, 2021. Although it initially rebounded on January 10, it failed to sustain its upward move and fell back below $40,000 January 20. It has hit a low of $38,250 so far.
Technical indicators show that the decline move is losing strength. The first sign is in the volume (red arrow), which is below average knowing that the price of BTC has just reached a new annual low.
The second sign is visible in the daily RSI, which has dropped below 30. The RSI is a momentum indicator, and readings below 30 are usually considered an oversold sign.
The last time the RSI was this far oversold was in May 2021, when Bitcoin price was near $30,000. A major upward movement then ensued.
The course support levels
So far, Bitcoin’s price has declined 43.7% from its all-time high. Such non-retracement falls have so far been uncommon for BTC.
Moreover, the price is just above the $38,000 horizontal support zone, which coincides with the 0.786 Fibonacci retracement level located at $37,450.
Bitcoin’s next move
The downward movement measured from the price highs appears to have formed a corrective five-wave pattern. In this case, it would appear that BTC is in wave five of this decline (in black).
The area with the most confluence of supports is found between $35,000 and $35,800. This range is obtained by using the resistance of the outer Fibonacci retracement 1.61 (in black) on wave four, as well as the length 0.618 of waves 1-3 (in white).
Thus, it is possible that this area acts as the hollow of the whole structure.
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