Bitcoin (BTC) has been showing bullish signs since March 11th. It is currently nearing the end of a descending wedge pattern that has been in place since March 18th.
Bitcoin has been falling since hitting a local high of $48,189 on March 28th. The move down was initially rapid but has slowed somewhat since March 11th. During this time, the RSI generated a significant bullish divergence (green line). Such divergences often precede upward moves.
Furthermore, while not generating bullish divergence, the MACD has been generating successively higher bars.
As for price action, BTC is trading just above the $38,000 horizontal support area that has been in place since early March. A drop below this level would be an extreme bearish move that could lead to lower prices.
Short term BTC movement
A look at the six-hour chart raises the possibility of a breakout for two main reasons.
BTC has been trading within a descending wedge since April 18. The wedge is often viewed as a bullish pattern, meaning that it leads to breakouts most of the time.
Second, similar to the daily timeframe, both the RSI and MACD have generated bullish divergences.
If there is a breakout, the main resistance area would be $43,000. That target is the 0.5 Fib retracement resistance level and a horizontal resistance area.
Wavenumber analysis
The most likely wave count suggests that BTC is nearing the end of an ABC corrective structure (red) that has been in place since February 10th.
Hitting a bottom near current levels would give waves A and C an exact 1:1 ratio, which is common in such structures.
The number of sub-waves is shown in yellow in the chart below, suggesting that BTC is in the fifth and final sub-wave that has taken the shape of a final diagonal.
Therefore, the wave number is consistent with readings from the daily and six-hour timeframes, suggesting that a breakout is likely.
To beClick here for InCrypto’s previous Bitcoin (BTC) analysis
Disclaimer
All information contained on our website is published to the best of our knowledge and for general information purposes only. Any actions taken by the reader based on the information contained on our website are entirely at your own risk.
Learn Crypto Trading, Yield Farms, Income strategies and more at CrytoAnswers
https://nov.link/cryptoanswers
Comments are closed.