Bitcoin price is showing signs of establishing a bottom and starting a new uptrend. However, the volume and volatility of the market has been decreasing, which assures the bulls to decrease their positions and wait for another bottom to buy again.
Bitcoin price is trading below a strong downtrend channel formed since November 5. According to the 4-hour chart, we note that Bitcoin tried several times to break it without success, thus demonstrating the strong downward pressure it is under. However, the latest daily candles show that a consolidation is building around $42,000, we just have to wait for the outcome.
A sharp break above $44,275 could give us an opportunity to buy with targets at 48,795 that mathes the 200 EMA and up to the psychological level of $50,000.
Around the psychological level of $40,000, Bitcoin has left a candlestick pattern called Pin-bar. This technical figure has a projection of a strong upward movement. However, BTC price should trade above the low of the candle wick and wait for a confirmation above $44,300.
If Bitcoin fails to break and consolidate above SMA 21, the downtrend channel and -1/8 Murray, is likely an acceleration to the downside towards the key support of -2/8 Murray located at 37,500.
Support and Resistance Levels for January 17 - 18, 2022
Resistance (3) 44,994
Resistance (2) 43,750
Resistance (1) 43,346
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Support (1) 42,082
Support (2) 40,176
Support (3) 37,500
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Scenario
Timeframe H4
Recommendation: sell below
Entry Point 43,750
Take Profit 37,500 (-1/8)
Stop Loss 44,500
Murray Levels 37,500 (-2/8) 43,750 (-1/8) 50,00 (0/8)
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