Bitcoin is recovering after a massive drawdown


Bitcoin marked a local low on January 11 and has been growing since then. However, this is probably just a pullback after the previous correction, and not the beginning of a new bullish trend.

The current trend will be considered bullish as long as BTC is trading above $ 36,701.

Bitcoin continues to rise

The bitcoin (BTC) rate formed a local minimum of $ 30,261 on January 11, after which it began to strengthen. This low coincides with the 0.382 Fib level of the retracement of the entire bullish move. It is worth noting that this rebound was preceded by the emergence of strong signals of hidden bullish divergence on the RSI.

Despite the rebound, technical indicators are still bearish. MACD is steadily declining, and the Stochastic Oscillator has formed a bearish crossover.

If BTC reverses, the next nearest support area will come into play at $ 29,050.

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MTC schedule. Source: TradingView

Possible rebound

On the 6-hour chart, Bitcoin has advanced above the 0.618 Fib level of the previous bearish retracement and is now approaching 0.786 Fib level at $ 39 483. Horizontal resistance is also located here.

Technical indicators are gradually becoming bullish.

Despite this, the current price movement still looks more like a correction, rather than the beginning of a new bullish move. The situation will change only if BTC makes a clean breakdown of the $ 39,483 resistance area.

MTC schedule. Source: TradingView

There are no signs of weakness on the 2-hour chart so far. The MACD and RSI indicators are growing.

In addition, the BTC rate is moving along the upward support line, which coincides with the minor support area of ​​$ 36,200.

As long as BTC is trading above this level, the trend will be considered bullish.

MTC schedule. Source: TradingView

Wave analysis

Judging by the results of the wave analysis, the BTC rate probably completed the formation of the ABC corrective structure with the ratio of waves A: C as 1: 1. Since the price has not yet bounced, we can assume that wave C will expand to the 1.61 Fib level of wave A, where the price will peak at $ 42,505.

This will mean a renewal of the historical maximum, but this does not cancel the corrective nature of the current movement (flat correction pattern).

MTC schedule. Source: TradingView

Sub-wave analysis (red in the chart below) suggests that the BTC rate is within the final 5th wave, which can be either extended or normal.

As long as trading is above the low of wave 4 at $ 36,717, we would expect the wave to continue to rally and expand.

MTC schedule. Source: TradingView

Conclusion

As such, Bitcoin is likely still correcting, however, the northward pullback could continue as long as BTC is trading above $ 36,717.

You can read the previous Bitcoin forecast here.

Disclaimer: Trading cryptocurrencies carries a high level of risk and is not suitable for all investors. The opinions expressed in this forecast do not reflect the opinions of the editorial staff of BeInCrypto.

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Karice Dabule

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