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Bitcoin (BTC) analysis after Price Jump: Bottoming Mastered?

4 min read

Almost seven trading days have passed since Bitcoin (BTC) was able to shake off its months-long FTX-related stalemate and, after better than inflation data, marched back to the USD 21,500 area with a brilliant price rally. In this multiple resistance zone, derived from the historical highs of November 2022, the moving average line EMA200 in the daily chart and the higher-level Golden Pocket in the area between USD 21,464 and USD 21,892, the recovery movement recently came to a standstill. Since then, the Bitcoin price has been oscillating around USD 21,000 and is reducing its overbought state over time.

The current resilience of the key cryptocurrency to negative news is remarkable. Even the news about the bankruptcy of the lending provider Genesis this Friday morning (Jan. 20) has had no impact on the BTC price so far. Since the beginning of the week, however, there has been an ascending wedge formation that is to be interpreted bearishly, which Bitcoin left in the middle of the week and has not been able to regain since then. It remains to be seen whether the bulls will generate enough buying power to push the price back above the bottom of the wedge. The quarterly figures of the streaming giant Netflix from yesterday evening, which were initially positively rated by market participants, could have a supportive effect.

Bitcoin (BTC) price analysis 01/20/22
4-hour chart Price analysis based on the pair of values BTC/USD on Coinbase
  • Bullish price targets: $21,376/21,438, $21,650/21,874, $22,255, $22,491, $22,803, $23,246, $24,192, $24,925, $25,170/25,342

Bitcoin: Bullish price targets for the coming trading weeks

For now, the cops can breathe easy. The chart picture has brightened up again for the buyer side for the time being due to the brilliant price jump last weekend. Only when the indicated price consolidation, indicated by the bearish dissolved wedge, was negated by recapturing the blue resistance zone around the 78 Fibonacci retracement and Bitcoin briefly recaptured the blue resist area, does the upper edge of the wedge formation come into focus again. Above the historical high at USD 21,650, a preliminary decision for the coming trading days can be expected between USD 21,825 and USD 21,874. If the BTC price breaks out dynamically above this resist area, there is space up to USD 22,225. A march through to the zone between the 161 Fibonacci extension and horizontal resistance at USD 22,491 should not come as a surprise.

The recovery movement is gaining momentum

This zone is the first relevant target area for the bulls. A course reset must be planned for here. The USD 22,491 already acted as a tough nut for the buyer side in September 2022. Only when this mark has also been surpassed by the end of the day does further price potential open up into the red resist area between USD 22,803 and USD 23,246. This zone represents the last chart-technically relevant reversal area below the medium-term price target of USD 24,192. A breakout above USD 23,246 should bring Bitcoin back to this important target via the intermediate station USD 23,721. Although the BTC price should initially bounce off here, the chance of a subsequent increase up to the maximum bullish target range between USD 24,925 and USD 25,342 for the coming time would then increase noticeably. The high from August of the previous year can be found here.

  • Bearish Targets: $20,666, $20,369/20,226, $19,703, $19,346/19,081, $18,771, $18,379, $17,907, $17,494, $16,924, $16,633/16,284

Bearish bitcoin price targets for the coming trading weeks

If the bears manage to prevent a jump back above USD 21,438 and Bitcoin slips below USD 20,897, the focus should be on USD 20,666 again. In addition to the 23 Fibonacci retracement, the make-or-break line of the last trading days runs here. A breach of this support would mark an immediate drop back into the orange zone between $20,369 and $20,226. With the supertrend in the 4-hour chart and the EMA50 (orange), several supporting indicators are waiting here. If the selling pressure remains high and Bitcoin dynamically slips below this area, the next target price will be activated at USD 19,703. However, this support should only have a short-term effect. A consolidation back into the green support area between USD 19,346 and USD 19,081 would be more likely. A directional decision can be expected in the coming weeks. With the golden pocket of the corrective move off the yearly high, this area is a potential reversal point for the bulls.

A false breakout is up for grabs

If the buyer side does not manage to use this zone as a springboard for a new price attack and USD 19,081 is permanently abandoned, Bitcoin is likely to fall to at least USD 18,771. However, a retest of the red support zone between USD 18,379 and USD 17,907 would be more likely. Here the buyer camp must do everything possible to stabilize the BTC course. Abandoning this area would be fatal for the bulls. If the course reversal fails, the correction will extend to USD 17,442. This price level represents the maximum bearish target mark for the coming weeks. A sell- Off with Bitcoin to the area around USD 17,000 or even to the conceivable medium-term bearish price target in the form of the green support zone between USD 16,663 and USD 16,284 can no longer be ruled out. Investors should use pullbacks up to $19,346 for new entries. From a technical point of view, everything would still be in the green for the bulls up to this zone.

All content in this article is for informational purposes only and in no way serves as investment advice. Investing in cryptocurrencies, commodities and stocks is very risky and can lead to capital losses.

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