Bitcoin Hovers above $34,000 Support as Buyers Emerge in the Oversold Region

Bitcoin (BTC) has continued its downward movement, falling to a low of $33,855. In the last three days, the price of BTC has consolidated above the $34,000 support.

Today, the largest cryptocurrency is trading at $35,345 at the time of writing. If the buyers push the BTC price upwards and it hits the resistance at $41,634, it means that the selling pressure will increase again. The bears will try to push the BTC price to the psychological low at $30,000. On the other hand, if the bulls break out above the $42,000 resistance zone, Bitcoin will come out of a deeper downward correction. Another downward move is unlikely. However, if the bulls break above the $51,000 resistance, Bitcoin will trade in the uptrend zone. It is likely that the upward momentum will resume above the high at $51,000. Meanwhile, BTC/USD is consolidating above support at $34,000, and a break below this support would signal the resumption of the downtrend.

Bitcoin indicator reading

Bitcoin is at level 25 of the Relative Strength Index for period 14. Since January 21, the largest cryptocurrency has been trading in the oversold region of the market. As soon as buyers appear in the oversold region, the downtrend should be over. However, the price bars are still below the moving averages, which indicates further downward movement. Bitcoin is below the 20% range of the daily stochastic. The cryptocurrency is still trading in the oversold zone.

Technical indicators:  

Major Resistance Levels - $65,000 and $70,000

Major Support Levels - $60,000 and $55,000

What is the next direction for BTC?

According to Fibonacci analysis, it is likely that BTC/USD will end the downtrend above the $34,000 support level. During the price drop on December 4, a candlestick tested the 78.6% Fibonacci retracement level. This gives the impression that the BTC price will fall, but will initiate a reversal at the 1.272 Fibonacci extension or at $34,160.20. Today, the BTC price is moving above the 1.272 Fibonacci extension.

Disclaimer. This analysis and forecast are the personal opinions of the author and 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.