Bitcoin made another try to break below $43,000 yesterday but bulls respected support and price is now again bouncing towards $46,500. There is potential for a bigger bounce as we mentioned in our previous analysis as the RSI has provided a short-term bullish divergence.
Red lines- bullish divergence
Green lines -Fibonacci retracement levels
Green rectangle -bounce target area
Bitcoin continues to trade above the important 38% Fibonacci retracement level. As long as this is the case we expect a bounce towards the green rectangle area around $49,000 price level. Short-term trend remains bearish as price is making lower lows and lower highs. The RSI is not following price and has already provided a bullish divergence. That is why we expect at least a short-term bounce. The bullish divergence is not a reversal signal but only a warning. For short time frames this signals can be ignored, but traders need to be cautious as at this point such a bounce is justified. Failure to hold above $43,000 will be a bearish sign. Next downside target is at $40,800 and next at $38,200.
