Bitcoin (BTC) is showing signs of a potential local bottom due to bullish readings in the weekly and daily time frames.
The Bitcoin price movement during the week of July 17-24 was notably bullish. BTC reached a high of $24,276, but after a retracement reached a close of $22,600, which was still roughly $2,000 above the opening price.
The indicator readings are also bullish because the RSI has moved outside of its oversold territory (green icon). At the end of 2018, a similar movement (green circle) was the catalyst for the beginning of a long-term bullish rally.
If the RSI were to break out above its descending trendline (black) and move above 50, it would confirm that the trend is bullish.
Additionally, the price has bounced at the $19,250 horizontal support area (green arrow), a level that acted as the all-time high resistance in 2017 (red arrow).
BTC breaks out
The daily chart paints a mostly bullish picture.
Firstly, the price has broken out from a descending resistance line that had been in place since April 5. Breakouts from such long-term structures usually lead to significant upward moves.
Secondly, Bitcoin has also moved above the $22,300 horizontal area and validated it as support. So, the price has broken out from both a diagonal and a horizontal resistance level.
Finally, the daily RSI has increased above 50 (green icon), a movement that is associated with bullish trends. The previous time this indicator crossed below 50 (red icon) was on April 6. Thus, the indicator was below 50 for the entirety of the descending resistance line and crossed above 50 once the price broke out, further increasing its validity.
If the upward trend continues, the closest resistance area would likely be reached be at $29,370. This is the 0.382 Fib retracement resistance level.
The three-hour chart shows that Bitcoin has been trading inside a descending parallel channel since its July 21 high. Such channels usually contain corrective structures, meaning that an eventual breakout from it would be expected.
Moreover, there is considerable overlap inside the channel, suggesting that the decrease is corrective.
So, a breakout from the channel seems to be the most likely scenario.
For Be[in]Crypto’s previous bitcoin (BTC) analysis, click here