Bitcoin (BTC) increased considerably on Oct 4, creating another bullish candlestick and moving definitively above the $47,800 resistance area.
Short-term weakness is developing which could lead to a decline before the bullish movement continues.
BTC moves above resistance
BTC continued its ongoing ascent on Oct 4 and bounced at the $47,800 resistance area, above which it had moved the day prior (green icon). Now the area should serve as a support.
Technical indicators in the daily time frame have turned bullish. The MACD is in positive and increasing territory and its histogram reading is almost positive.
Similarly, the RSI is moving upwards and has crossed above 50.
However, there is resistance from the Supertrend line, which is bearish (red icon). This is the final major resistance area that BTC has to clear before it can move toward new highs.
Future movement
The six-hour chart shows more clearly that BTC has moved above the $ 47,800 area and validated it as support afterwards.
While the MACD and RSI are showing some signs of weakness, neither has turned bearish yet.
The next closest resistance zone is at the September highs of $ 52,950.
The two-hour chart shows some signs of weakness, such as bearish divergences developing in the MACD and RSI.
However, the latter may be breaking away from its bearish divergence trendline. If it’s successful in doing so, BTC could likely continue its path toward new highs.
Otherwise, a short-term decline could ensue.
Validating the breakout
The two-hour chart shows that BTC has broken out from a short-term ascending parallel channel. This is a sign that a new bullish momentum has likely started. The number of long-term waves is also bullish.
After validating its resistance line as support (green icon), BTC resumed its upward movement.
However, the decrease seems too small to be part of wave four (black). Therefore, it is more likely that wave three has extended, and another drop will eventually follow prior to the continuation of the upward move.
