Bitcoin (BTC) Price Rejected by Psychological Resistance at $30,000, Is the Upside Over?
The price of Bitcoin (BTC) surged strongly over the past week and is currently challenging the psychological resistance level at $30,000. Technical signals indicate a minor correction might occur before the uptrend continues.
The Bitcoin price has been trading within an ascending triangle since it bounced off the previous resistance level at $25,200 on September 11th. This is a bullish pattern, often leading to breakouts in most cases.
Indeed, the BTC price broke above this pattern and confirmed it as support on October 19th (green arrow), marking the continuation of the recovery phase. The target for this pattern is $31,200, found by measuring the height of the pattern and adding it to the breakout point.
The daily RSI (Relative Strength Index) has entered the overbought zone but hasn’t created any bearish divergence. This indicates that the bulls are still in control of the market.
Therefore, BTC price is likely to continue rising towards the pattern’s target at $31,200. However, this target coincides with the resistance zone at the yearly high so the bears are likely to defend it fiercely.
Despite the bullish outlook from the daily timeframe, the 2-hour chart shows a potential correction might occur in the coming days. This is due to the formation of bearish patterns at the psychological resistance level of $30,000.
The bearish patterns include: a pin bar candle (1), an evening star pattern (2), and a bearish engulfing pattern (3). They become stronger when combined with bearish divergence in the 2-hour RSI indicator (red line).
Therefore, BTC price might correct towards the nearest support zone at $29,300 or the previous resistance level at $28,900.
The most probable scenario suggests that Bitcoin will rise towards resistance zone at the yearly high at $31,200. However, it might correct towards $29,300 or lower to $28,900 before continuing the uptrend.
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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