Bitcoin (BTC), which had been in place for three month, has now broken above the descending resistance line. It appears to be trying to validate the support level, validating the breakout.
Since the beginning of April, Bitcoin was trading under a descending resistance. This downward movement led to a June 18th long-term low at $17,622
Since then, the price had been moving sideways but finally broke through above the line on August 18. This breakout coincided also with a reclaiming of the $20,000.00 horizontal resistance area. BTC is currently trying to validate both of these levels as support.
The daily RSI has risen above 50, and the green line is an ascending support. The nearest resistance zone would be located near $29,370 if the upward trend continues.
Temporary movement
The six-hour chart offers a mixed outlook, which is not the case with the daily chart.
BTC trades within an ascending parallel channel. Corrective movements are common in such channels, which means that an eventual collapse from them is possible. On July 19, the resistance line (red icon) rejected the price and the RSI generated a bearish divergence. (green line).
BTC trades above the channel’s midline and the previously mentioned $21,700 horizontal support zone. This is a bullish sign.
The direction of the trend in the short-term is uncertain until the price moves out of the channel, or falls below its midline.
Analysis of BTC wave count
If you look at the wave count from April 1, it is likely that bitcoin has made a five-wave decline (yellow). Wave five of this possible count was cut short, meaning that it ended higher than wave three.
This would complete wave five, which is a longer-term count.
The alternative count is derived from the ambiguity in six-hour charts, which show some bearish signs. This chart shows that BTC just completed wave 4 and could drop another time to complete wave 5. This count is problematic because wave four is tenx longer than wave two. This is very unusual for structures like these.
For Be[in]Crypto’s previous bitcoin (BTC) analysis, click here.
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