The Bitcoin (BTC) price has confirmed the previous descending resistance line as support and broken above the short-term pattern. It is expected to continue rising in the coming days.
Descending Resistance Line
The Bitcoin (BTC) price had fallen below the descending resistance line since reaching its yearly high at $31,800 on July 13th. During this period, the price dropped to the previous resistance zone at $25,300 before bouncing back up.
The recovery phase helped BTC break above the descending resistance line and confirmed it as support on October 12th (green arrow). This indicates that the previous correction phase has ended, and a new uptrend might follow.
The daily RSI (Relative Strength Index) formed a bullish divergence. This occurs when momentum decreases, but the price forms a higher low. It means that the bulls is buying strongly on minor dips, expecting the price to continue rising.
A significant horizontal resistance zone was found at $28,700. Breaking above this level could help BTC rise to the next resistance level at $30,100.
Short-Term Pattern
The 4-hour chart supports the possibility of further uptrend on the daily chart. It shows that BTC has broken above a short-term descending parallel channel, indicating the end of the short-term correction.
The breakout candle is a bullish engulfing candle with high volume (green ellipse). This validates the breakout.
The 4-hour RSI supports the continuation of the uptrend as it surges into the overbought zone without forming any bearish divergence.
Currently, the price is approaching a minor resistance zone at $28,000. However, due to the formation of the parallel channel for more than 13 days, the post-breakout movement could be strong.
Therefore, the BTC price is likely to consolidate below $28,000 for a short period, with a breakout to follow.
Conclusion
Technical indicators suggest that BTC will continue to rise in the next few days. The most potential target for this move is $28,700.
Breaking above this level could help BTC rise to the next resistance level at $30,100.
Disclaimer: Please note that this article is for informational purposes only and should not be taken as investment advice. As an investor, it is important to do your own research before making any decisions. We are not responsible for any investment decisions you make based on this information. Not Financial Advice.
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