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Bitcoin (BTC) has risen markedly from the Jan 10 lows and is giving a series of signals suggesting that the retracement phase is over.
Bitcoin has been trading inside a descending parallel channel since December 27. As a result, on January 10, the price formed a local minimum at $ 39,650. From here, the BTC rate immediately bounced and recovered above the lows of December 4 in the region of the channel’s median line. A long bottom wick appeared on the chart, which is traditionally considered a sign of buying pressure.
Further, on January 13, BTC broke through the resistance line of this channel, confirming the completion of the short-term correction.
Now the nearest resistance is marked in the area of $ 45 850 (Fibo level of 0.5 correction and horizontal resistance). Previously, this area acted as a support.
What the indicators are talking about
Technical indicators on the daily chart are showing bullish signs. This is especially noticeable on the MACD – its histogram gives very strong and distinct bullish divergence signals (green line). Such signals often precede price increases.
In addition, successively rising momentum bars (green icon) coupled with a bullish price close signal a bullish reversal.
A source: TradingView
BTC Wave Analysis
Long-term results wave analysis remain controversial, however shorter-term patterns suggest Bitcoin has completed its decline from all-time high (black).
The subwavelength analysis results are shown on the chart in red.
A source: TradingView
The bullish breakout from the channel and the deep retracement of potential sub-wave 4 (in red) give us reason to believe that the current rally is unlikely to be part of sub-wave 4.
The most likely scenario is the completion of the correction. In this case, the BTC rate formed a bottom after it marked a minimum of $ 39,558 on January 10.
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