Bitcoin Breaks Through $35,000 — Is $40,000 Next?

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In Brief
  • Bitcoin reached another all-time high on Jan. 6.

  • Daily technical indicators are bullish but lower time-frames are showing weakness.

  • BTC has broken out from a short-term descending resistance line.

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On Jan. 6, Bitcoin (BTC) reached a new all-time high of $35,879.

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Despite some weakness in lower time-frames, Bitcoin is expected to continue increasing toward $39,000.

 

Another Bitcoin All-Time High

On Jan. 3 and 4, BTC created two successive bearish candlesticks, a shooting star and a hanging man. These are normally considered bearish reversal signals when found in an upward trend. These indicators suggest that BTC is likely to decrease.

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However, the bearishness was invalidated with a bullish candlestick yesterday, which nearly broke the previous highs.

On Jan. 6, BTC reached yet another new all-time high of $35,879.

In the daily time-frame, technical indicators have yet to show any signs of weakness.

BTC Chart By TradingView

Lower Time Frames Show Cracks

The six-hour chart shows that despite the new high,  both the RSI and MACD are showing significant weakness in the form of bearish divergences.

The divergence in the MACD is visible in both the histogram and MACD line. However, the RSI has yet to complete a bearish swing failure.

BTC Chart By TradingView

The two-hour chart shows a breakout from a descending resistance line, which was the catalyst for the upward movement.

For BTC to keep increasing, it has to validate the $34,500 area as support and continue trading above it.

BTC Chart By TradingView

BTC Wave Count

The wave count suggests that BTC is in sub-wave 5 (orange) of wave 5 (blue).

While the rally is extremely overextended and a correction is overdue, yesterday’s movement makes it likely that BTC has one more high to complete before it begins its correction.

BTC Chart By TradingView

A closer look at the movement gives a target of $39,170, found by projecting the length of waves 1-3 (black) and by using an external retracement on wave 4 (orange).

BTC Chart By TradingView

Conclusion

Bitcoin is expected to continue increasing towards $39,000 before a significant corrective movement likely begins.

For BeInCrypto’s previous 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 discovered cryptocurrencies while he was getting his MSc in Financial Markets from the Barcelona graduate school of Economics. Shortly after graduating, he began writing for several different cryptocurrency related websites as a freelancer before eventually taking on the role of BeInCrypto's Senior Analyst.

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