BTC Technical Analysis January 8: Correction Deepens to $90K – Signs of Bullish Shift Ahead?

Bitcoin’s current dip as far as $89,560 could be coming to its conclusion. The $90,000 horizontal support level is holding up to now. Could the $BTC price switch on Thursday or Friday and start to rise back to the $94,000 resistance level, or might there be a further sting in the tail from the bears?

$BTC price reaches bottom of bull flag

Source: TradingView

According to the 4-hour chart overhead, the $BTC price has reached the lower limit of the small bull flag. This coincides with strong horizontal support at $90,000, so the price will either fall through or it will bounce. If the bears win out and the price is forced through the supports, the major trendline and further horizontal support await below. If there is indeed a bounce, the price would probably head back to the top of the flag and a possible breakout.

The Stochastic RSI indicators at the bottom of the chart would go along with the bullish thesis, given that they are currently running along the bottom of their limit.

Two strong support levels

Source: TradingView

As the $BTC price comes down to retest the bottom of the bull flag and the $90,000 horizontal support, it can be seen that the RSI indicator at the bottom of the chart is coming down to retest the uptrend line. If it falls through, this will be imitated in the price action. 

The price does have another big support below, in the shape of the bottom of the bear flag, the major ascending trendline, and the $88,000 horizontal level. There is the possibility of a quick candle wick down to these supports.

All in all, there is a lot of support for the price here, and so it might be expected that the turn-around back to the upside could take place soon. The next few hours will be crucial.

Bullish phase on the way?

Source: TradingView

The weekly chart view shows how important it is for the $BTC price to remain above the major ascending trendline, and if possible, the $90,000 horizontal support level. A hold above $90,000 at the end of this week would confirm this level as strong support on this high time frame, leading to a probable price rise from there.

A breakout of the green ascending triangle would be a fantastic achievement for the bulls, also leaving the path open to the next target level of the all-important $108,000 resistance.

Could this coincide with the top of the bear flag? This is a possibility, and if it did, this would be even stronger resistance for the bulls to overcome. 

At the bottom of the chart, the MACD illustrates that the indicator lines are straightening up, and are starting to head in more of a horizontal direction. At the same time, the pink histogram bars are continuing to reduce in size. This is pointing to a bullish phase on the horizon. If this happens, it just remains to be seen just how bullish it can be.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.