On August 16, Bitcoin
(BTC) formed a bearish engulfing candle and broke down from a rising support line. Sponsored Sponsored
BTC is in the process of validating this line as resistance, after which it may resume its decline towards the nearest support area.
Bitcoin Continues Dec
Bitcoin has been declining since peaking at $50,500 on August 23. This peak was very close to the 0.618 Fib (black) retracement resistance level at $51,200. Moreover, the downward move was preceded by bearish divergence on RSI and MACD
indicators. Sponsored Sponsored The
main support area is located at the $42,400 level. This is the support level at the 0.382 Fib retracement (white) and coincides with the supertrend support line (green).
Breakdown from support
The six-hour chart coincides with the readings from the daily interval. The ongoing decline was preceded by a bearish divergence on the RSI and MACD.
Moreover, there was a breakdown from the support line on August 26. Currently, BTC is in the process of confirming this line as resistance (red icon).
If it fails to regain it, it is likely to continue declining at least until it reaches the mentioned support area at $42,400.
Neither RSI nor MACD showed any bullish reversal signals, so continuation of declines is likely.
Future movement of BTC
While the direction of the long-term trend is not yet clear, both bullish and bearish wave numbers suggest that a short-term decline is expected
If the completed upward move was part of wave three of the bullish impulse (orange), then we would expect a sharp wave four due to the concept of alternation.
If the move is a completed A-B-C corrective structure (black), then a downward move towards new lows could follow. In any case, a decline at least to the support level at the 0.382 Fib retracement is likely.
For now, the possibility remains more likely that the rise was an A-B-C structure and bitcoin will eventually generate a lower low.
<img alt=” src=”image/svg+xml;base64,PHN2ZyBoZWlnaHQ9JzgyNicgd2lkdGg9JzE1NjEnIHhtbG5zPSdodHRwOi8vd3d3LnczLm9yZy8yMDAwL3N2ZycgdmVyc2lvbj0nMS4xJy8+” />BTC Chart
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