(BTC) price fell only slightly last week, opening at $49,239 and closing at $48,808. Sponsored
In the short term, the price has broken down from a rising support line and could likely continue its downward movement towards the nearest support area at $42,400
Bitcoin Encounters Weekly Resistance
From August 23-29, Bitcoin had a fairly quiet week, moving from a low at $46,250 to a peak at $50,500. The weekly chart continues to show mixed signals.
On the bearish side, price has broken the long-term ascending support line and may be in the process of confirming it as resistance (red icon). Moreover, this line coincides with the resistance of the supertrend indicator (red icon). Moreover, the volume on the uptrend move is weak compared to the volume during the May crash.
is above 50. BTC chart courtesy of Tradingview
Therefore, a look at the lower timeframe is required to determine the direction of the next move.
Similar to the weekly interval, the daily chart does not provide a clear picture that would help determine the direction of the trend.
Bitcoin is trading just below a major resistance area at $51,200. This is both a horizontal resistance area and a resistance level at the 0.618 Fib retracement.
Second, significant bearish divergence has developed on both the RSI and MACD (blue). This has only led to a moderate decline that is not proportional to the level of divergence. However, there is also a potential hidden bullish divergence
(yellow) developing on the RSI.
Volume has also been consistently declining during the uptrend, which is a sign of weakness in the upward movement.
While the direction of the trend is not clear, it cannot be considered bullish unless Bitcoin manages to regain the $51,200 area. This would also result in the recovery of the long-term ascending support line as described in the previous section.
The nearest support area is at the $42,400 level. This is a support level at the 0.382 Fib retracement and a horizontal support area that coincides with the supertrend support line.
<img alt=” src=”image/svg+xml;base64,PHN2ZyBoZWlnaHQ9JzgyNycgd2lkdGg9JzE1NjEnIHhtbG5zPSdodHRwOi8vd3d3LnczLm9yZy8yMDAwL3N2ZycgdmVyc2lvbj0nMS4xJy8+” />BTC Chart by Tradingview The
future movement of B
six-hour chart leans towards the possibility that BTC will move downwards as it shows a breakdown from a rising support line.
While it initially appeared that BTC had regained the line (red circle), it has since fallen below it.
As with the daily interval, the RSI and MACD are neutral. However, a continued decline towards the support area at $42,400 would turn them bearish.
The exact long-term wave count remains unclear as both bullish (orange) and bearish (black) scenarios are possible
However, both of these scenarios point to a short-term decline. Bitcoin is in wave four of the bullish impulse and a sharp decline would be expected due to the concept of alternation. However, an upward move would likely come later.
On the other hand, if the A-B-C corrective structure is complete, then BTC could continue moving towards new lows. In either case, a short-term downward move is likely.
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