Technical Analysis: BTC Creates Bullish Pattern, Price Aims For $30k
Bitcoin has created a bullish pattern in the high time frame. The price may continue to rise this week.
Bullish pattern
Bitcoin broke out of a descending wedge pattern in November with a large bullish candle. This move also helped BTC break the long-term downtrend structure by breaking the $21.5k resistance level and touching the next resistance level at $25k.
After the correction, Bitcoin successfully flipped the $21.5k level into support and created a bullish engulfing pattern. This is a strong uptrend pattern, indicating that the bulls have control of the price action.
Therefore, BTC may breakout the $25k resistance level in the near future.
The RSI indicator is trending upwards and above 50, supporting the possibility of a breakout for Bitcoin. If successful, the next resistance level can be found at $30k, which was created by the previous support level.
Short-term outlook
After BTC hit the strong resistance level at $25k, the 4-hour RSI indicator generated a bearish divergence, causing the price to drop afterward.
However, the bulls seem to be viewing this dip as a buying opportunity, successfully defending the Fib support zone of 0.382-0.5 (23.3k-23.7k) and creating a bullish pin bar candle.
This move also formed a hidden bullish divergence in the RSI indicator. A strong signal of a continuation of the uptrend.
Therefore, BTC is likely to revisit the $25k level once again.
Dropping below the Fib support zone of 0.382-0.5 will invalidate this prospect and indicate that the price may drop to $21.5k.
Conclusion
The most likely prospect indicates that BTC will break through the $25k level. Losing the Fib support zone of 0.382-0.5 (23.3k-23.7k) may cause the price to drop to $21.5k. Afterward, the price is expected to consolidate in the range of $21.5k-$25k for a period of time.
Read more:
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