March 28, 2024

You wanted volatility - technical analysis of January 21, 2022

Volatility has returned in full. Only the price, unfortunately, went in the wrong direction. Minimumsthe range is finally broken, the course has returnedbelow $42K and is now forming a smaller low below $39.6K. This also marks a break in the bullish market structure with the first smaller low following the rise from $28K.

Weekly schedule

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Still, an encouraging option for the bullscould be a close above $39.6k, which would imply a huge bullish SFP (failed breakout pattern) forming and a ton of liquidity found below that level.

Today, such an idea looks like grasping fora straw, but I'm not trying to give hope to anyone - I just indicated an opportunity. The higher the weekly close, the less hopeless it will look, and vice versa. Pretty obvious.

Black horizontal lines can be seenas range boundaries. As you can see, the break down to $42k puts us back into the lower range we spent most of the summer in. This puts the $28K minimums directly back into play.

&gt;$53K = new all-time highs on the horizon

&lt;42K = reduction to $28 thousand is on the agenda.

Doesn't mean we'll definitely get there, but that's how I understand the current trading range.

However, many experts and investors (Novogratz, 3 arrows, etc.) consider the $38 thousand area as a potential bottom. Time will tell.

Daily chart

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Looks depressing. Yesterday everything looked good, the price was growing and the bulls were already in euphoria. How everything changes in one day.

You can see how important the $39.6K area is. A daily close above this level would be a great show of strength from the bulls, and a weekly close would be even more important.

The daily RSI is now at 26, in the "oversold" zone. In the May fall, the minimum value of the RSI was 23.2. In March 2020, it dropped to 15 and it was strong.

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The price reversed right from the center line of the Bollinger Bands yesterday, the indicator's key resistance.

4-hour chart

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There is bullish potential on the 4-hour chartOversold RSI divergences are my favorite signal. On the daily chart, it has already been confirmed. However, it would be nice to see the price close slightly lower than it is now, and then a clear increase in RSI. Actually, somehow there are too many wishes, so this is still far from confirmation. Just an idea.

Be that as it may, the RSI on this timeframe is alreadyseveral times reached "oversold", never recovering to the level of "overbought". This will eventually happen, even if it is only a bounce within a bearish trend.

 

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