Bitcoin (BTC) Resumes Dip Back to Support Levels
Bitcoin (BTC) has been decreasing since being rejected at the $36,600 level on June 29.
It’s potentially trading inside a short-term ascending wedge, which is normally considered a bearish pattern.
Bitcoin trading range
BTC has been increasing since bouncing above the $31,400 horizontal support area on June 22. So far, it has managed to reach a high of $36,600, doing so on June 29.
The upward movement was preceded by significant bullish divergence in the MACD, RSI, and Stochastic oscillator. However, neither has a bullish reading yet. The RSI is just below 50 and the MACD signal line is still negative. Furthermore, the Stochastic oscillator has already made a bearish cross.
The BTC price fell yesterday but did not create a bearish engulfing candlestick. Nevertheless, it seems to have resumed its downward movement today.
The main resistance area is at $40,550. This is a horizontal resistance and the 0.382 Fib retracement level.
Future BTC movement
The two-hour chart shows that BTC is potentially trading inside an ascending wedge. The resistance line of the pattern has been touched multiple times while the support line is not yet confirmed since it has only been touched twice.
There is strong support at $32,640 (the 0.618 Fib retracement support level) and the potential ascending support line of the wedge.
The MACD and RSI are both decreasing, supporting the possibility that the price will fall towards this level.
Wave count
The longer-term count suggests that BTC is still in wave five of a bearish impulse. The aforementioned June 29 rejection occurred right at the 0.618 Fib retracement resistance level. it was likely the top of sub-wave two (black).
While corrective structures are often contained inside parallel channels, the high failed to reach the resistance line of the channel (red arrow). In addition, BTC has now fallen below the midline of the channel, another bearish sign.
A breakdown from the channel would likely confirm the downward trend and indicate that BTC will decrease towards $23,600 and potentially $19,800.
For BeInCrypto’s previous bitcoin (BTC) analysis, click here.
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