Bitcoin (BTC) created a bullish candlestick on Feb 23 and is now approaching a make-or-break resistance level.
BTC increased considerably on Feb 23, bouncing at the $36,600 horizontal support area (green icon). The area has acted as support since the upward movement began on Jan 24.
However, the price barely failed to create a bullish engulfing candlestick, since the closing price close was only slightly lower than the preceding open.
The next macro resistance is found at $44,200.
Ongoing BTC bounce
The six-hour chart shows that the main resistance area is located at $40,050, created by the 0.382 Fib retracement resistance level.
In addition to this, the resistance corresponds with the midline of a descending parallel channel, from which BTC broke down on Feb 15.
This possibility is further supported by the two-hour chart, which shows that BTC broke out from a descending resistance line after generating a significant bullish divergence.
As a result, an upward move towards $40,050 seems to be the most likely scenario.
Wave count analysis
There are two likely possibilities for the long-term Bitcoin count.
Similarly, there are two main possibilities for the short-term count. Whichever transpires will also likely determine the long-term trend.
The first scenario suggests that BTC has completed an A-B-C corrective structure.
Therefore, an upward movement towards $49,350 would be expected. This target is found by projecting the height of the previous increase.
The second scenario suggests that the ongoing decrease is part of a bearish impulse. In this case, the price is correcting inside wave four prior to another drop.
Whether or not BTC manages to break above the Feb 14 low at $41,575 (red line) will be crucial in determining which of the counts is most likely to transpire.
For BeInCrypto’s previous Bitcoin (BTC) analysis, click here
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