Cryptocurrency has been a popular topic of conversation for years, with Bitcoin (BTC) spearheading the way for all other digital assets. After jumping in price by almost a thousand percent in 2020, the BTC price has reached yet another crucial resistance level and investors are keen to see if the world's largest cryptocurrency can break through.

In early March 2021, the Bitcoin price reached a long-term resistance line and then rapidly increased in value. This increase was helped along the way by a "long lower wick" which, in technical analysis, means that buyers have overcome the bearish pressure and accelerated the bullish momentum. This has taken Bitcoin up to a $31,000 resistance level, that had been previously acting as a support since January 2021.

The Relative Strength Index, a momentum indicator which shows overbought or oversold conditions, is currently sitting above 50 which indicates bullish potential in the market. Breaking through the $31,000 resistance level and validating it as a new support area could lead to a further increase towards an average price of $46,000. A rejection from this resistance area, however, could result in a price decrease down to a possible $24,500.

In order to analyse the rate of increase, crypto traders have used Fibonacci retracement levels to identify a correction after the big price movement of February, and have identified an upward channel which indicates a corrective structure. This channel is currently at risk of breaking down, which could lead to a price decrease. However, a significant increase in price and the rejection of the bearish divergence could invalidate this break and lead to further bullish momentum. On April 18th, a bullish engulfing candle formed, meaning that the next day's price was higher than the day before, indicating a possible surge in buyers.

In conclusion, the technical analysis from the daily time frame is favorable for the Bitcoin price, with a bullish outlook if the cryptocurrency manages to break through the $31,000 resistance area convincingly.



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