The rise in bitcoin was an important signal, suggesting that a cyclical bottom in BTC has been reached and that the price will soon accelerate to new highs.
Bullish week leads BTC to long-term resistance
As the results of technical analysis of the weekly chart show, the price of BTC reached a horizontal resistance area of $30,000. This is one of the most important horizontal levels for bitcoin, as it has alternately acted as both support and resistance since the beginning of the year.
On June 23, BTC hit a new yearly high of $31,431. Although the price has since declined, its close for the week was the highest of the year.
In spite of the fact that the price has fallen since then, its close for the week was the highest of the year.
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Source: TradingView
The weekly RSI index is also bullish. It is a momentum indicator that traders use to assess whether the market is overbought or oversold when trying to determine whether to accumulate or sell an asset. Values above 50 and the uptrend indicate that the bulls still have the upper hand, while values below 50 indicate the opposite.
In the case of BTC, the RSI is above 50 and rising. The indicator rebounded from the 50 line two weeks ago, indicating a bullish trend.
The number of bitcoin “hodlers”
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Can BTC decisively break above $30,000
The shorter daily timeframe gives a decidedly bullish outlook. In particular, this is indicated by the price dynamics and the results of the wave analysis.
Price dynamics indicate that the price of BTC made a bullish breakout from the descending parallel channel. Because such channels usually contain correctional structures, a breakout of its upper boundary was the most likely scenario.
Wave analysis also confirms this possibility, since the price movement within the channel looks like a completed W-X-Y corrective structure (red). Since the previous rise is a five-wave bullish structure (white), a bullish breakout from the channel suggests that the correction is complete.
So we are now likely dealing with a new five-wave bullish structure.
In the longer term, this is probably wave three (black) of the uptrend that began in November 2022. The ratio of waves one to three as 1:1 gives us a high near $42,700. If wave three lengthens and the wave length ratio reaches 1:1.61, BTC could hit a high of $53 600.
Source: TradingView
Despite this bullish long-term outlook for BTC, a price drawdown below the second wave low of $24,800 (red line) would mean that the trend remains bearish.