The price of Bitcoin (BTC) may retest the $48,000 area, here's why?

The price of Bitcoin (BTC) has reclaimed a significant support level and formed a bullish candle. It is expected to move higher in the near future.

Weekly Outlook

The price of Bitcoin (BTC) has retraced after facing strong resistance at $48,000, which was rejected during the week of January 8th to January 14th, 2024 (indicated by the red arrow).

In the previous week, the BTC price broke down below a crucial support level at $40,500 and reached a low of $38,600. However, this turned out to be a false breakdown as the BTC price reclaimed this level, forming a bullish pin bar candle.

This has set up a bear trap and is often followed by a strong upward movement.

The weekly RSI indicator has rebounded and is on the verge of breaking above the descending divergence trendline. Both of these are bullish signals, indicating that the bulls are regaining control.

Therefore, it is likely that the BTC price will retest the strong resistance zone at $48,000 once again. This figure corresponds to a 12.48% increase from the current price level.

Short-Term Correction

Despite the bullish signals from the weekly timeframe, the 4-hour chart indicates that the BTC price faced resistance at the horizontal level of $43,500 yesterday (indicated by the red arrow).
The rejection is supported by a bearish divergence on the 4-hour RSI indicator, which often precedes correction phases.
Therefore, the BTC price may decline towards the nearest horizontal support zone at $41,500 in the short term.

Conclusion

The most likely scenario suggests that the BTC price will rise to retest the strong resistance zone at $48,000. However, a correction to $41,500 may occur before this.

The bullish outlook will be invalidated if the BTC price closes the weekly candle below the $40,500 region.