Bitcoin hodlers felt a bit of relief recently. After making a new all-time high in 2021, Bitcoin entered the bearish market territory and declined throughout 2022.&
Everything last year was bearish Bitcoin, starting with the negative sentiment surrounding the crypto industry and ending with the general US dollar strength.&
But those looking at small details, especially technical ones, noticed some encouraging facts in the last months. First, the market formed a falling wedge pattern in the last several months &- a bullish reversal pattern.&
Second, the Relative Strength Index, one of the most powerful technical oscillators, showed a bullish divergence since the last quarter of 2022. Third, the current rally eyes key resistance level, one that might turn out being a pivotal one.&
Falling wedge confirms the reversal
On its way up, Bitcoin climbed above $20k for the first time since last November. In doing so, it triggered massive crypto short liquidations, that topped $100 million in last week’s trading.&
In other words, the upward move has caught shorts by surprise.&
Technical traders have spotted the potential falling wedge pattern seen above. However, until the market broke its upper edge, it was difficult to call for a reversal to be in place.&
Now that it did, Bitcoin remains bullish as long as the lows hold.&
RSI bullish divergence has been in place for several months
Another bullish sign came from the RSI. A bullish divergence in red on the chart above warned about a possible reversal. Coupled with the falling wedge pattern, it was just another bullish clue to watch in the last months.
$30k looms large for Bitcoin bulls
The big question now is &- what comes next? The technical dynamics are quite simple for Bitcoin at this point.&
If it holds above the lowest point in the falling wedge pattern, it can test the resistance seen at $30k. Judging by how strong support was in the past, the level should be pivotal, meaning that a break above should trigger more upside.&
The post Is it safe to buy Bitcoin amid trading above 20k for the first time since November? appeared first on CoinJournal.
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