Bitcoin (BTC) increased considerably on Feb 7 and broke out from its short-term pattern, making it likely that the bottom is already in.
The weekly chart shows that BTC increased considerably during the week of Jan 31-Feb 7, and has continued this upward movement this week.
If BTC manages to reach a close above the current price, it would create a morning star pattern, which is often considered a bullish reversal pattern because the entire decrease of Jan 17-24 would be negated. Therefore, it’s crucial that BTC reaches a weekly close above $43,070 in order to complete this pattern.
Daily movement
The daily chart provides a bullish outlook due to the bullish readings from the MACD and RSI, which are both moving upwards.
The former is positive and the latter has moved above 50, both signs of a bullish trend.
BTC is currently approaching the 0.382 Fib retracement resistance level at $46,712.
In addition to this, in the six-hour chart, BTC has already broken out from an ascending parallel channel. This is a sign that the upward move is impulsive and could likely lead to new local highs in the short term.
BTC wave count analysis
Due to the ongoing increase, it seems almost certain that the long-term wave count is signaling that the bottom is already in.
As for the short-term wave count, BTC has likely completed or is close to completing wave three (red) of a five-wave upward move. The sub-wave count is shown in black.
The Feb 8 high of $45,492 was made at a confluence of Fib levels, namely the 1:1.61 ratio of waves 1:3 (red) and the 0.618 length of sub-waves 1-3 (black).
So, it’s possible that BTC will retest the resistance line of the channel before resuming its upward trend.
For BeInCrypto’s previous Bitcoin (BTC) analysis, click here
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