Bitcoin’s recent price action suggests a potential recovery, as chart analysis shows a series of critical signals across various timeframes. At press time, Bitcoin has managed to hold key support levels as it continues to trade around $54,865.84, marking a 0.73% daily gain.
Bullish Divergence on the 4-Hour Chart
A deeper look at the 4-hour chart posted by an analyst reveals a bullish divergence on the RSI (Relative Strength Index). While the price action of Bitcoin has been forming lower lows, the RSI has been holding a higher low.
crazy to see this STILL hold
— Charting Guy (@ChartingGuy) September 8, 2024
4H bullish divergence was ALMOST invalidated but held a higher low on the RSI just barely$BTC 📈 soon imo https://t.co/U7DSPaYTZU pic.twitter.com/OZkXZ9XbPk
This divergence is a key indicator suggesting that momentum might be shifting, and a potential price reversal could occur soon. Although there was a moment where the divergence almost invalidated, Bitcoin successfully maintained its upward momentum on the RSI, preventing a bearish breakdown.
Wedge formations typically indicate an approaching price breakout, especially when the pattern tightens. Bitcoin has been trading within a descending wedge, but the price is nearing the apex, increasing the chances of an upward breakout. Bitcoin needs to break above the $56,148 resistance level to confirm this bullish breakout.
Key Support Levels Reinforced
Bitcoin’s price has shown resilience at critical support levels around $54,570. Despite multiple retests of the trendline zone, Bitcoin has managed to hold firm, reinforcing market confidence in the strength of this support.
On the daily chart, the RSI sits at 38.20, close to the oversold territory. This suggests that Bitcoin might soon recover from its recent downtrend, with oversold conditions often serving as precursors to upward price movements. Additionally, the MACD (Moving Average Convergence Divergence) indicator shows bearish momentum still dominating, but the histogram indicates that the selling pressure is beginning to taper off.
MACD Flip: Bitcoin (BTC) To Witness Potential Dips to $46KMarket Sentiment: Analyst’s Perspective
Another analyst has noted that Bitcoin may sweep lower levels to trap bearish traders before rebounding. This strategy involves pushing the price lower to induce bearish sentiment and liquidate weak long positions. Once selling pressure dissipates, a sharp rebound could follow, catching bears off guard.
#Bitcoin
— Nebraskangooner (@Nebraskangooner) September 8, 2024
Beautiful 🤝 https://t.co/SyZwzemHT7 pic.twitter.com/jgi11KjRf8
This market sentiment aligns with the current technical indicators. If Bitcoin maintains its support levels and bullish divergences, it may soon witness an upward surge if the $56,148 resistance is successfully breached.
