The Bitcoin price has reached a confluence of support areas that suggest a bounce is in store.
Bitcoin Price Highlights
- The Bitcoin price is trading inside a short-term ascending channel.
- There is support at $10,100.
- There is resistance at $11,000.
The Bitcoin price has been trading inside an ascending channel since Feb 3.
At the time of writing, the price was trading inside the $10,100 area, which is likely to act as support. The price broke out above this level with a bullish engulfing candlestick on Feb 11 and is currently validating it as support.
In addition, support is also provided by the ascending support line and the 200-hour moving average (MA).
A breakdown from the channel would likely take the price to $9,600, but due to the considerable support, that seems unlikely.
The recent decrease was combined with a bearish divergence in the RSI. However, the latter did not fall below the 50-line, bouncing on it instead. This is a bullish sign, and since the price has already decreased as a result of the divergence, the failure to go below the 50-line could suggest that the decrease is done, lining up with the short-term readings.
Looking at the daily chart, the price is still following the same curved parabolic support line, with the resistance area being at $11,000. At the time of writing, the price was very close to the support line, possibly preparing for a bounce.
In addition, even though the price has been decreasing for two days, the decrease has been easily contained inside the body of the bullish engulfing candlestick on Feb 11, which started the day by decreasing but closed well above the previous day’s high.
Since there is more than half the day left for the current candlestick, the same could occur today if a bounce transpires.
To conclude, the Bitcoin price has reached a significant support area from which it looks likely to bounce and head towards $11,000.
For those interested in BeInCrypto’s previous Bitcoin analysis, click here.
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Author: Valdrin Tahiri