Bitcoin Price Analysis: After Gaining 18% Since Yesterday’s Low, Is BTC Bottom In?

Bitcoin Price Analysis: After Gaining 18% Since Yesterday's Low, Is BTC Bottom In?

Bitcoin is up by an impressive 18% since yesterday’s low at $31,100.

It fell beneath the $36,750 (.786 Fib) support yesterday and ended up closing the candle at $34,760 (downside 1.414 Fib Extension) after dipping as low as $31,100 in the session. The session turned to be one of the worst days bitcoin had seen dollarwise.

Today, following the huge rebound, BTC is attempting to recover and break back above the $36,750 – $37K level, once again.

This pattern could justify a short-term reversal as bitcoin might form a “W” formation with a double bottom around the $30-$31K area – one retest was on Wednesday’s crash, whereas the other one from yesterday.

Additionally, on the short-term chart, bitcoin is currently trading at the upper boundary of a descending price channel that we have been tracking since May 10th. A breakout above this level would be the first signal that BTC is ready to continue its recovery towards the $40K area as a first possible target.

In the short-term, the last day’s critical support-turned-resistance of $42K is the first major obstacle, along with the 200-days moving average line at $40.3K as of now. On the other hand, Bitcoin will look to maintain the $30K support.

BTC Price Support and Resistance Levels to Watch

Key Support Levels: $34,760, $33,520, $32,465, $31,100, $30,000.

Key Resistance Levels: $37,000, $38,000, $40,300, $41,350, $42,055.

Looking ahead, the first level of support lies at yesterday’s closing price of around $34,760 (downside 1.414 Fib Extension). Beneath this, support lies at $33,520, $32,465, $31,100 (yesterday’s low), and $30,000 (Wednesday’s low).

On the other side, the first resistance lies at $37,000 (bearish .236 Fib) which is strengthened by the upper boundary of the descending price channel. This is followed by $38,000, $40,300 (200-day MA), $41,350 (bearish .382 Fib), $42,055 (Jany 2021 highs and the past 5 days high), and $44,750.

The RSI has bounced from the extremely oversold level at 20 and is starting to point higher. If it can continue beyond 30 and create a higher high, this would be a strong signal that the bearish momentum is quickly fading again.

Another interesting bullish reversal sign is the RSI bullish divergence formed on the daily timeframe, which is usually rare for bitcoin over the past year.

Bitstamp BTC/USD Daily Chart

BTC/USD Daily Chart. Source: TradingView

Bitstamp BTC/USD 4-Hour Chart

BTC/USD 4-Hour Chart. Source: TradingView

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Cryptocurrency charts by TradingView.

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