Bitcoin (BTC) Rallies 13% Since Rebounding from Local Lows

Bit­coin (BTC) has been increas­ing since reach­ing a local low of $33,000 on Jan 24. It’s now approach­ing the first sig­nif­i­cant Fib and hor­i­zon­tal resis­tance area.

Bit­coin has been trad­ing inside an ascend­ing par­al­lel chan­nel since April 2021. On Jan 24, 2022, it reached a low of $32,917 and rebound­ed. This served to val­i­date the sup­port line of the chan­nel and BTC has increased by 13% since.

The main resis­tance area is found at $40,800. This is an area that pre­vi­ous­ly act­ed as sup­port until BTC broke down below it on Jan 21. There­fore, the area is now expect­ed to pro­vide resistance.

Ongoing BTC bounce

The two-hour chart shows that BTC is approach­ing resis­tance at $38,200. This is both the 0.5 Fib retrace­ment resis­tance lev­el and a hor­i­zon­tal resis­tance area. A break­out above it would be a cru­cial devel­op­ment in cre­at­ing a bull­ish structure. 

Tech­ni­cal indi­ca­tors are also show­ing bull­ish sig­nals. The RSI, which is a momen­tum indi­ca­tor, has already moved above 50 (green icon) sug­gest­ing that the short-term trend is bull­ish. Sim­i­lar­ly, the MACD is near­ly positive

How­ev­er, it remains to be seen if this move above 50 (red cir­cle) will only be a short-term devi­a­tion, sim­i­lar to what hap­pened on Jan 20. 

A break­out and close above $38,200 would go a long way in con­firm­ing that the increase is not just a relief rally.

Short-term movement

The 15-minute chart shows that BTC is attempt­ing to move above the $37,400 area, which pre­vi­ous­ly reject­ed it twice (red icons). 

How­ev­er, it’s trad­ing inside an ascend­ing par­al­lel chan­nel, which is usu­al­ly a cor­rec­tive pat­tern. The move­ment inside the chan­nel also has very fre­quent over­laps, fur­ther sup­port­ing the pos­si­bil­i­ty that it’s corrective. 

Because of these sig­nals, an even­tu­al break­out from the chan­nel seems to be the most like­ly sce­nario, pri­or to the con­tin­u­a­tion of the down­ward movement.

Despite this poten­tial short-term drop, the most like­ly long-term count still sug­gests that a bot­tom has been reached.

For BeInCrypto’s pre­vi­ous Bit­coin (BTC) analy­sis, click here!

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