Crypto Quill

Bitcoin price has been showing a strong bullish momentum in the past few hours, breaking above the key $42,500 resistance level and reaching a new weekly high of $43,779. The leading cryptocurrency is now trading above $43,000 and the 100 hourly simple moving average, indicating a positive trend in the near term.

Bitcoin Breaks Out of Consolidation Phase

Bitcoin price had been consolidating in a range between $40,000 and $42,000 for the past few days, after a sharp drop from the $46,000 level on January 26. The price found support near the $40,650 level and formed a base for a fresh increase.

On January 29, the bulls gained strength and pushed the price above the $41,200 and $42,000 resistance levels. The price also cleared the 50% Fibonacci retracement level of the downward move from the $46,000 swing high to the $40,650 swing low.

The breakout was followed by a strong rally above the $42,500 and $43,000 resistance levels. The price pumped towards the $43,800 level and set a new weekly high at $43,779. The price is now consolidating gains above the $43,000 level and the 100 hourly simple moving average.

Bitcoin Faces Key Hurdles Near $44K and $45K

Bitcoin price is currently trading above the 23.6% Fibonacci retracement level of the upward move from the $41,651 swing low to the $43,779 high. There is also a major bullish trend line forming with support near $42,150 on the hourly chart of the BTC/USD pair.

The trend line is near the 76.4% Fibonacci retracement level of the upward move from the $41,651 swing low to the $43,779 high. Therefore, any downside correction is likely to find strong bids near the $42,500 and $42,200 levels.

On the upside, the price is facing a major resistance near the $43,800 level. A clear break above this level could open the doors for more gains towards the $44,200 and $44,500 levels. These are the next key hurdles for the bulls to overcome.

The ultimate target for the bulls in the current wave is the $45,000 resistance level. This level is significant as it coincides with the 1.618 Fibonacci extension level of the downward move from the $46,000 swing high to the $40,650 swing low.

A successful close above the $45,000 level could lead to a further rally towards the $45,500 and $46,000 levels. The next major resistance sits at $46,500, which is the previous swing high.

Bitcoin Remains Well Supported On Dips

If bitcoin fails to rise above the $43,800 resistance zone, it could start a downside correction. However, the price is likely to remain well supported on dips, as long as it is above the trend line and the 100 hourly simple moving average.

The main support is now forming near the $42,200 level and the trend line. If there is a close below this level, the price could lose its bullish momentum and start a fresh decline. In the stated case, the price could dive towards the $40,650 support level, which is the base for the recent increase.

Technical indicators:

• Hourly MACD – The MACD is now gaining pace in the bullish zone.
• Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is now above the 50 level.
• Major Support Levels – $43,200, followed by $42,500.
• Major Resistance Levels – $43,800, $44,500, and $45,000.