Bitcoin (BTC) surged 11.5% last week and formed a bullish engulfing candlestick on the weekly chart.. A successful break of the $25,000 level will support long-term growth and make the $29,500 area the next target.
Weekly chart technical analysis results show that Bitcoin (BTC) formed a bullish engulfing candle last week, making its first rising low since September 2021.. In addition, this low tested the strength of the downward logarithmic resistance line (green circle) as support.. During periods of previous bear markets, such events were signals about the beginning of a new bull cycle.
Earlier in March 2022, Bitcoin bounced off this same descending resistance line and confirmed a bearish long-term trend reversal (red circle). Now, the opposite pattern has appeared on the chart, and this could be a signal for a bullish reversal.
This forecast is supported by the weekly RSI. The indicator turned 50 into support, which is a bullish sign. At the same time, in the same March 2022, the index rebounded from this level and remained below 50 until January 2023.
Source: TradingView BTC Targets 2021 Lows
Above $25,000, there is no significant resistance on the chart, which means that if this mark is broken, the market can quickly attack the next important resistance area of $29,500 (red box).
The $29,500-$31,700 range acted as support in the summer of 2021 during the previous bull market. In addition, it provided price support in May 2022 after the resonant collapse of the Terra (LUNA) ecosystem, although it was broken a month later.. Now he must act as a resistance.
Rebound after minor correction
On the daily chart, you can also see confirmation of the bullish outlook for BTC.. First, price bullishly broke above the descending logarithmic resistance line (in black) mentioned above and turned it into support.
In addition, against this background, Bitcoin also pulled back to the Fibo level of 0.382 correction of the entire bullish move from the absolute bottom of $15,487 (November 21, 2022). A shallow correction to this Fibo level is bullish as it indicates that the strong uptrend is likely to continue.
During the correction process, BTC tested the $21,300 level as a support (green line). Previously, at the beginning of November 2022, the price bounced from here. On the other hand, in January 2023, the market consolidated under this barrier for several days, and then took it.
The retest of former resistance as support is another bullish signal for a continuation of the uptrend.. However, a break of the BTC rate below this area will become a bearish factor and may provoke a fall to the Fibo level of 0.618 correction at $19,200.
Source: Trading View
Thus, both the daily and weekly charts give bullish signals for BTC.. A clean break of $25,000 resistance could quickly push the price to $29,500. Meanwhile, a rebound would threaten important support at $21,300.
See also: Why did BTC grow and what is the Bitcoin forecast given by crypto investors