Bitcoin (BTC) Briefly Moves Above $32,000 After Crucial Bullish Divergences


After breaking out from a short-term consolidation pattern, bitcoin (BTC) reached a high of $32,222, its highest price since May 10.

BTC has been rising since hitting a low of $26,700 on May 12. So far, the increase has led to a high of $32,222 on May 30.

The upward movement was preceded by a bullish divergence in the daily RSI (green line). Additionally, the RSI broke out from a bearish trendline (dashed) prior to this increase.

More importantly, the price has now recovered the horizontal zone of $30,500. The area had been serving as support since May 2021, before the May 2022 outage. If he manages to validate it as support, that would mean the supposed outage was just a diversion.

In case upward movement continues, the closest resistance levels would be between $37,500 and $40,000. These are the 0.5-0.618 Fib retracement resistance levels.

Channel distribution

The two-hour chart shows that prior to the May 30 breakout, BTC had been trading in a descending parallel channel since May 16. These channels usually contain corrective moves, which means that a breakout of these is likely.

The two-hour RSI is overbought, suggesting that the short-term movement is overextended. However, there is no bearish divergence in place, which would indicate that a drop is likely.

BTC Wavenumber Analysis

There are two main possibilities for wave number.

It could be that BTC is in the C wave of an A-B-C corrective structure (black). Giving waves A:C a 1:1 ratio would lead to a high of $34,000. Conversely, giving them a 1:1.61 ratio would lead to a high of $37,600.

Alternatively, if the price is instead in a number of bullish waves, it would be in the third wave of a five-wave upward move, which would take it towards $40,000.

The longer-term wave count also suggests that the price might have bottomed.

Either way, a move towards at least $34,000 seems likely.


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