Bitcoin has created a bearish candlestick pattern.
BTC is probably moving within a descending triangle.
There is resistance at $ 32,800.
After hitting a new all-time high on January 3, Bitcoin (BTC) fell the next day, creating two bearish daily candlesticks in a row.
Bitcoin is expected to descend below its near-term figure and decline towards the support areas shown below.
Bitcoin rally runs out of steam
After hitting a record high of $ 34,789 on January 3, BTC price stagnated the next day, falling to a low of $ 28,130. That said, it did manage to create a long top wick (indicated by a green arrow below) before closing at $ 31,988.
While the top wick is a bullish sign, the candlestick is not. So far, BTC has created two bearish candlesticks: a shooting star on January 3, and a hangman figure on January 4. These are two patterns normally seen as signs of a bearish reversal.
Despite the bearish candlesticks, technical indicators do not yet confirm the bearish reversal. The MACD generated a lower volume bar in today’s data but has yet to hit a close. Additionally, the Stochastic Oscillator has yet to form a bearish cross, and the RSI has also not moved below 70.
If a downward move occurs, the three closest support levels would be at $ 25,230, $ 22,290 and $ 19,340 (fibonacci retracement levels 0.382, 0.5 and 0.618). In addition to matching fibonacci levels, the areas at $ 22,290 and $ 19,340 also provide horizontal support.
The two hour chart also provides a somewhat bearish outlook
First of all, we can see that BTC is possibly moving within a descending triangle, which is considered a bullish reversal pattern.
Next, BTC appears to have passed that pattern overnight on January 4, but suffered a rejection from resistance at $ 32,800 (red arrow). The previous advance would therefore have been only a deviation.
So as long as BTC fails to break through and then regain minor resistance at $ 32,800, the trend is considered to be down and expected to descend.
A decline that would cross the entire height of the figure would bring the BTC down to $ 25,240, close to the Fibonacci level 0.382 in the previous section.