After the January 7 plunge, the price of Bitcoin (BTC) has fallen above the psychological price level of $40,586. The bulls have bought the dips and Bitcoin is trading at $42,012 at press time.
It is believed that BTC/USD has reached the oversold region of the market. Buyers are likely to emerge in the oversold region to push prices higher. In the last four days, the selling pressure has eased as the market has reached the oversold region.
However, if selling pressure picks up, Bitcoin will hit the previous low of $39,678 and rally. This will drive the price of BTC back up. On the upside, buyers will have a difficult task to regain the bullish momentum. The bulls need to break above the moving averages and keep the price above the $48,000 high.
Bitcoin indicator reading
Bitcoin has fallen to level 28 on the Relative Strength Index for period 14. This indicates that the price of BTC has fallen into the oversold area of the market. It means that the selling pressure is likely to stop. Similarly, the BTC price is below the 20% area of the daily stochastics. The stochastic bands have been in the oversold area for the past week. The uptrend will continue if buyers show up in the oversold region. Bitcoin will start to rise if the price bars stay above the moving averages.
Technical indicators:
Major Resistance Levels – $65,000 and $70,000
Major Support Levels – $60,000 and $55,000
What is the next direction for BTC?
Bitcoin has fallen into oversold territory. Currently, the BTC price is moving above the current support, reaching a high of $42,012. Meanwhile, a downtrend started on December 17. A retracement candlestick tested the 78.6% Fibonacci retracement level. The retracement suggests that the BTC price will fall but will reverse at the 1.272 Fibonacci extension level or $39,553.70.
Disclaimer. This analysis and forecast are the personal opinions of the author and are not a recommendation to buy or sell cryptocurrency and should not be viewed as an endorsement by CoinIdol. Readers should do their own research before investing funds.
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