Bitcoin (BTC) is approaching a support line from which it has broken down previously. Recovering support would be a very bullish move, but its rejection remains the most likely scenario.
The daily chart shows bitcoin has risen since December 4, after hitting a local low of $ 42,000. On the same day, he created a very long bottom wick, which is seen as a sign of buying pressure.
It also caused BTC to break against an ascending support line that had been in place since July 20. This is a bearish sign that suggests the rally to the upside may have ended.
On top of that, the technical indicators are bearish.
The MACD, which is created by both short and long term moving averages (MA), is falling and is negative. This is a sign that the short term AD is slower than the long term average. While this potentially creates a higher momentum bar (green icon), there is still plenty of time before the daily close.
The RSI, which is an indicator of momentum, is below 50, another sign of a downtrend.
Currently, BTC is back on the ascending support line, but could potentially validate it as resistance. The line also coincides with the retracement level of 0.382 Fib at $ 52,350.
Due to bearish readings on the indicators, a rejection looks more likely than recovering support.
The six hour chart shows that BTC is potentially trading in a descending parallel channel. While he initially collapsed below on December 4, he has since recovered his support line.
Since the majority of the tip took the form of a wick, the channel can still be considered valid.
Currently, Bitcoin is in the process of reclaiming the middle line of the channel.
The resistance line of the channel coincides with the previously described $ 52,350 resistance zone. Therefore, a break above would be a major bullish sign.
Number of Bitcoin waves
The most likely long-term wave count suggests that BTC is still in a bullish phase.
The short-term tally shows that BTC has completed Wave A of an ABC corrective structure. This means that he is currently in wave B, which is moving upwards.
The most likely area where Wave B could end is near $ 58,800. This is the 0.618 Fib retracement resistance level and a horizontal resistance area.
However, many short-term declines could occur until BTC hits this level.
For BeInCrypto’s previous Bitcoin (BTC) analysis, click here.
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