Bitcoin Consolidates Below $34,000 Resistance, Prepares Ground for Possible Breakout

BTC price is fluctuating below the $34,000 resistance zone. Today, buyers have attempted to break the resistance zone but were repelled. This has resulted in the current fluctuation below the resistance.

As the fluctuation continues, the price action is forming small body candlesticks called Doji and Spinning tops. These candlesticks describe the indecision between buyers and sellers about the direction of the market. Nevertheless, the current fluctuation below the resistance is an advantage on the part of the bulls. 

Price consolidation below a resistance level increases the chances of a possible breakout. Assuming a breakout occurs above $34,000 high; it will signal the resumption of upside momentum. The $40,000 overhead resistance is likely to be retested and broken. On the other hand, Bitcoin has survived bears’ attempt to sink BTC on January 11 and 21. However, if the bears break the $30,000 support, the king coin will slump to a deeper correction. The coin can easily drop to $25,800 low. Meanwhile, BTC is range bound between $30,000 and $34,000.

Bitcoin indicator reading

In a downward move, the BTC price has broken below the trend line. Technically, it implies that the current trend has been terminated. The price can fall or resume a sideways move. However, if the bulls break and close above the trend line, it will signal the resumption of an upward move. BTC price is above the 20% range of the daily stochastic. This implies that the coin has bullish momentum.    

Key Resistance Zones: $40,000, $41,000, $42,000

Key Support Zones: $20,000, $19,000, $18,000   

What is the next direction for BTC/USD?

Bitcoin price is in a downward move. The Fibonacci tool has indicated a further downward movement of Bitcoin if the $30,000 support cracks. On January 21 downtrend; a retraced candle body tested the 61.8% Fibonacci retracement level. The retracement gives the impression that BTC will fall and reverse at level 1.272 Fibonacci extension. That is a low of $26,274.00.

Disclaimer. This analysis and forecast are the personal opinions of the author that are not a recommendation to buy or sell cryptocurrency and should not be viewed as an endorsement by CoinIdol. Readers should do their own research before investing funds.