Bitcoin Bounces Back to Life after Nearly Dropping Below $30,000

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In Brief
  • Bitcoin has support levels at $32,100 and $29,000.

  • Daily Indicators have turned bearish.

  • BTC is following an ascending support line.

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Bitcoin (BTC) decreased significantly on Jan. 11, reaching a low of $30,402 after opening the day above $38,100.



While Bitcoin has regained some ground today after yesterday’s losses, it’s likely just a retracement in response to the prior downward movement.

 

Bearish Bitcoin Daily Reversal

Bitcoin decreased considerably on Jan. 11, continuing the descent that began on Jan. 8 to reach a low of $30,402.



The low took BTC considerably below the 0.382 Fib retracement support area of $32,107. However, the lower prices were bought up quickly, leaving a long lower wick in place, a sign of buying pressure.

At the time of press, BTC was trading near $36,000.

Despite the considerable bounce, technical indicators have turned bearish.

The MACD has created the first pair of successive lower momentum bars since the most recent portion of the upward movement began on Dec. 11. This is a sign of a bearish trend reversal, also strengthened by the fact that the RSI has dropped below 70.

If a bearish cross in the Stochastic oscillator were to occur, it would likely confirm that the trend has turned bearish.

The next support level is found at the 0.5 Fib retracement level at $29,000.

BTC Chart By TradingView

Ascending BTC Support

The six-hour chart shows that BTC also bounced on the ascending support line that has been in place since Dec. 14. Furthermore, the bounce was preceded by a significant hidden bullish divergence in the RSI, a strong sign of trend continuation. Despite this, the MACD is still decreasing.

Bitcoin is approaching the 0.618 Fib retracement level of the entire downward movement, which is expected to provide resistance. Until BTC manages to clear it, we cannot consider the trend bullish.

BTC Chart By TradingView

Wave Count

As explained in BeInCrypto’s wave count article from yesterday, BTC has probably begun a longer-term corrective movement.

The bounce from yesterday clearly shows the completion of five waves, a sign of either the beginning of a bullish impulse or the A portion of an A-B-C corrective structure (shown in white below). Due to the possibility of a longer-term correction, the A-B-C correction is more likely.

Therefore, we would expect the retracement to be complete near the 0.618 Fib level before another drop.

BTC Chart By TradingView

Conclusion

Despite today’s retracement, it’s likely that Bitcoin has begun a long-term correction. 

For BeInCrypto’s latest Bitcoin (BTC) analysis, click here!

Disclaimer: Cryptocurrency trading carries a high level of risk and may not be suitable for all investors. The views expressed in this article do not reflect those of BeInCrypto.

Disclaimer

All the information contained on our website is published in good faith and for general information purposes only. Any action the reader takes upon the information found on our website is strictly at their own risk.
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Valdrin is a cryptocurrency enthusiast and financial trader. After obtaining a masters degree in Financial Markets at the Barcelona Graduate School of Economics he began working at the Ministry of Economic Development in his native country of Kosovo. In 2019, he decided to focus full-time on cryptocurrencies and trading.

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