Bullish RSI divergence hints 10% relief Rally in Bitcoin price

Today, the Bitcoin price is trading at the $19723 mark and had previously retested the weekly support at $19500. The long tail rejection attached to the daily candle by decreasing volume increases the likelihood of a bullish reversal. Can the potential bull run regain the $20600 mark?

Highlights from Bitcoin Price Analysis:

• The BTC buyers found significant support at $19550
• Bitcoin price action remained trapped in a narrow range
• The intraday trading volume in Bitcoin is $24.3 billion, indicating a loss of 13.5%.

Source-Trading view

After the selloff in the second half of August, the Bitcoin price plunged to the $19,500 support and started a consolidation phase. This decline has offset around 75% of the gains recorded during the June to early August period, dropping prices by 22.5%.

Earlier this week, the Bitcoin price attempted to rally higher, but failed to surpass the nearest resistance at $20750. As a result, the coin price entered a narrow consolidation between $20750 and $19500.

Furthermore, the failed attempt mentioned above dropped the BTC price back to the $19500 mark. However, the declining volume during this bearish reversal reflects the weakening of the seller’s hand as we approach lower support.

Such volume activity with a far lower price rejection indicates a higher possibility of a bullish reversal. Thus, if the buyers pierce the $20750 resistance, the Bitcoin price may witness an extended relief rally before the bear trend continues.

A bullish reversal could boost prices by 10.5 or $14.5% to hit the resistance at $21900 or $22600 respectively. However, a bullish breakout above $22600 will weaken the bearish momentum and strengthen buyers for a $25000 breakout.

On the flip side, if the Bitcoin price took an immediate reversal from the $20750 resistance, the consolidation area would extend further and possibly break the lower support.

A break below $19500 will extend the correction phase to $18865 or $18000.

Technical indicator

Bollinger bands: coin price trading well below the midline reflects aggressive selling in the market. Moreover, a possible reversal may face dynamic resistance from this midline.

RSI indicator: A bullish divergence in daily RSI slope reinforces price reversal from $19500

MACD indicator: the fast and slow slopes drawn close to each other show the buyers’ attempt to regain trend control. A potential bullish crossover between these would encourage the $20750 breakout.

• Resistance level – $207501 and $22000
• Support level – $19550 and $18865