Analysis: Bitcoin likely to move to test resistance near $22,000
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Answer Analysis: Bitcoin likely to move to test resistance near $22,000
Bitcoin has been trading within a bullish parallel channel since hitting its lowest level on June 18.
The channel led to a high of Bitcoin at $25211 on August 15, but the price has been moving lower since then.
After initially bouncing at the channel support line, Bitcoin price officially collapsed on August 26th and the coin price continued to drop, reaching as low as $19,520.
Since then, the price has rebounded quite a bit, which could take the bitcoin price to the support line of the channel from which it has broken.
However, the daily RSI is bearish and has dropped below 50.
A possible upward movement in the price could bring the RSI back to the 50 line (as the red symbol appears in the chart below).
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The six-hour chart shows that Bitcoin has been trading below a descending resistance line since August 15th.
So far, the bitcoin price has made five attempts to break through, the last of which was on August 31.
Since the resistance weakens every time it is tested, a final breakout from this line is expected.
Additionally, the 6-hour RSI generated a very significant bullish divergence (the green line shown in the chart below), which also supports the possibility of a breakout.
If this happens, the nearest resistance area will be found between $21,740 and $22,370.
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These targets are the 0.382-0.5 Fibonacci retracement resistance levels.
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