Bitcoin (BTC) collapsed from a business model that had been in place since December 4. This indicates that BTC is still mired in a patch pattern
Bitcoin (BTC) has been trading inside an ascending parallel channel since reaching a local low on December 4th. When trading inside this channel, it peaked at $ 52,088 on December 27.
The high served to validate the channel midline and horizontal resistance zone of $ 51,600 as resistance. However, a downward movement has since occurred.
On December 29, BTC broke the ascending parallel channel and hit a low of $ 45,900. The break in the channel is seen as a bearish move and could lead to lower prices on the horizon.
Short term BTC movement
The six hour chart shows that BTC is trading just above the 0.618 Fib retracement support level at $ 45,850. This level coincides with the lows from December 13 to 20.
So it’s likely that BTC will create a lower lower in the Fib support range of $ 44,145 to $ 45,830 before resuming its upward movement. This range of support is created by the support levels of the Fib retracement of 0.618-0.786 (white).
There is no sign of a bullish reversal in place at this time.
Number of waves
Due to the channel outage, the wave count suggests that BTC is still mired in a corrective pattern and is likely in wave X of a complex WXY (pink) corrective structure.
This wave is expected to end between $ 44,100 and $ 45,300, which corresponds to the support levels of the Fib retracement of 0.5 to 0.618 (black).
Following this, an upward movement towards the range of $ 55,500 to $ 58,700 (retracement resistance levels of 0.5-0.618 Fib) would be expected. This would complete the Y wave and the whole corrective structure.
For BeInCrypto’s previous Bitcoin (BTC) analysis, click here
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