Bitcoin (BTC) broke a parallel descending channel on September 1 and is attempting to break out of the horizontal resistance area of $ 51,200.
Due to conflicting readings for technical indicators, we cannot accurately determine whether BTC will make it out the first time. However, eventual breakage is likely.
Short-term avoidance
BTC has been trading within a parallel descending channel since August 29. Such channels often contain remedial facilities.
After breaking through the lows on September 1, BTC broke out later in the day. So far, it has peaked at $ 50,450.
Both the MACD and the RSI are bullish, supporting the validity of the breakout.
Long term resistance
Despite the short-term breakout, BTC is still trading below the crucial resistance area of $ 51,200. This is both a horizontal resistance area and the 0.618 Fibonacci Retracement Resistance Level.
Technical indicators on the daily time frame remain bearish. MACD is no longer strong and is almost negative. Also, the RSI generated a bearish divergence.
However, a hidden bullish divergence is also developing (yellow), which is normally a strong sign of trend continuation.
Due to the mixed readings, a breakout or rejection will be required to determine the direction of the future trend.
wave count
most likely wave count suggests that BTC is in the fourth wave of bullish momentum (orange).
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As the breakout looks like a three-wave corrective structure, the most likely scenario would indicate that BTC will complete another slight drop before finally rising to the top.
While the target for the top of the fifth wave depends on the current low, a preliminary level would be between $ 57,700 and $ 60,500.
For BeInCrypto’s previous Bitcoin (BTC) analysis, click here.
Disclaimer
All information on our website is published in good faith and for general information purposes only. Any action taken by the reader on the information found on our website is strictly at your own risk.
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