Bitcoin (BTC) has broken above a three-month descending resistance line. It appears to be attempting to validate the level as a support, while validating the breakout in the process.
Bitcoin was trading below a descending resistance line since the beginning of April. The downside led to a long-term low of $17,622 on June 18.
Since then the price has mostly been moving sideways, but finally managed to break the line on 18 July. The breakout also coincided with a retest of the $20,700 horizontal resistance area. Currently, BTC is trying to validate both of these levels as support.
The daily RSI is above 50 and rising above an ascending support line (green line). If the upward trend continues, the next nearest resistance area can be found near $29,370.
short term movement
Unlike the daily chart, the six-hour chart offers a mixed outlook.
BTC is trading inside an ascending parallel channel. Such channels usually have corrective movements, which means that this will likely lead to an eventual breakout. The price was rejected by the resistance line of the channel (red sign) on July 19 and the RSI has generated a bearish divergence (green line).
On a bullish note, BTC is still trading above the channel midline and the $21,700 horizontal support area mentioned earlier.
The direction of the short-term trend is not clear until the price either exits the channel or falls below its midline.
BTC wave count analysis
The most likely wave count shows that bitcoin has already completed a five-wave downside (yellow) when measured since the beginning of April. In this possible calculation, wave five was truncated, ending above the bottom of wave three.
This count would also complete the longer-term wave five.
Alternative calculations come from ambiguity on the six-hour chart, which is showing some bearish signs. In this, BTC has just completed wave four and may fall once again to complete wave five. The issue with this count is that wave four is ten times longer than wave two, which is extremely unusual for such structures.
be for[in]Previous Bitcoin (BTC) analysis of crypto, click here.