After a massive bullish week, bitcoin (BTC) price has passed a key resistance level that could trigger another increase.
The daily chart for BTC shows the price rising from March 10, when it hit a low of $19,569 (green icon). The rise since then has been parabolic, forming a new yearly high at $28,567. The high of the most recent decline was made at 1.61 external Fib, which is a suitable level for a top.
However, the daily RSI remains bullish and is showing no signs of weakness. The indicator broke out from its bearish divergence trend line and is still rising.
Top of Movement or Start of Huge Rally?
There are two possible wave counts for the future course of bitcoin. The first suggests that the price is in the fifth and final wave of growth. Beyond the previously mentioned 1.61 outer Fibonacci level (white), the next key resistance lies at $32,000, giving wave five the same length as waves 1 and 3 combined. If this calculation is correct, there will be a significant drop later.
The second count is too fast. This indicates that the price has just started a longer term wave three (white), which could lead BTC to a new all-time high. The sub-wave count is given in black and indicates that the price is approaching the top of the sub-wave.
As BTC price is likely to top soon, the size of the drawdown will be crucial in determining the future trend.
Bitcoin (BTC) Weekly Outlook Decisively Positive
The weekly time frame bitcoin price chart shows that since hitting an all-time high of $69,000 in November 2021, the price has fallen below a descending resistance line. The downward movement ended with a low of $15,476 in November of the following year.
Price action since then has been decisively bullish, which bodes well for the future outlook for peer-to-peer blockchain technology.
First, BTC price retested the $18,700 support area, and then broke out from the descending resistance.
During the week of March 6-13, BTC price formed a very long lower wick, validating the line as support (green icon). This was followed by a bullish engulfing candlestick that caused a breakout above the $24,700 resistance area. The candlestick posted a 26% weekly increase, the most since December 2020 (red icon). The area is now expected to provide support.
The weekly RSI reading is also bullish. The indicator broke out of its bearish divergence trend line (black line) and moved above 50. This came after a long period of bullish divergence.
As a result, weekly readings from both price action and technical indicators are decisively bullish.
If the rise continues, the next resistance area lies at $35,680, formed by the 0.382 Fibonacci retracement resistance level (white). On the other hand, a close below $24,700 could catalyze a decline towards $18,700.
To conclude, the most likely bitcoin price forecast is an increase to at least $35,800 and possibly higher. A weekly close below $24,700 would invalidate this bearish outlook. If it does, it could catalyze a decline towards $18,700.
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