Bitcoin (BTC) is attempting to find support and create a higher low after a breakout from a short-term resistance line.
BTC has been declining below a descending resistance line since March 28. So far, this downward move has led to a low of $17,622 on June 18th. The price has since risen.
The main resistance area is at $23,275, created by a confluence of resistance levels. It is a:
- Horizontal resistance area
- 0.382 Fib retracement resistance level
- Coincides with the descending resistance line
The RSI rose above 30, breaking out of its oversold territory. This means that the trend is turning bullish and could suggest that a rise towards the resistance zone is likely. If the price achieves this, it would also take the RSI to its descending resistance line which has also been in place since March 28.
So, a breakout from these levels would confirm that the trend is bullish.
The two-hour chart shows that the price broke out of a descending resistance line and is currently trying to validate it as support.
Besides the line, which is now expected to provide support, the price is trading above the 0.382 Fib retracement support level at $20,150. So, these two levels could initiate a bounce and upward movement towards the aforementioned resistance line
If the price declines further, the next support would be at the 0.5 Fib retracement level at $19,670.
BTC wave count analysis
There are still several possibilities for the long-term wave count. On the other hand, the shorter-term count is clearer.
The most likely count indicates that price has completed a five-wave upward move (red) and potentially an ABC corrective pattern.
If the structure is a running flat correction, that it is likely already complete, since waves A:C have had a 1:1 ratio and the entire structure is contained inside an ascending parallel channel.
If the pattern becomes an uneven flat instead, the price could drop towards the next support at $19,670.