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Bitcoin Breaks Out but Bullish Trend Still Unconfirmed

2 mins
Updated by Kyle Baird
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In Brief

  • Bitcoin has broken out from a descending resistance line.
  • Daily indicators are still bearish but short-term signals are bullish.
  • BTC is in the C wave of an A-B-C corrective structure.
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Bitcoin (BTC) broke out from a descending resistance line that had been in place since the Jan. 8 all-time high price.

Despite this, neither technical indicators nor the wave count confirms a bullish Bitcoin trend. Rather, they suggest that another decrease is in store.

 

Bitcoin Breaks Out

Bitcoin was rejected multiple times by the descending resistance line but finally managed to successfully break out on Feb. 2, reaching a close significantly above it. With this movement, BTC also moved above the $34,000 resistance area.

However, technical indicators have yet to confirm the bullish movement, and BTC is trading very close to the 0.618 Fib retracement resistance at $37,000. Therefore, it’s not yet confirmed that BTC is in a bullish trend.

BTC Resistance Breakout
BTC Chart By TradingView

The two-hour chart provides a similar outlook.

While technical indicators have turned bullish, BTC is trading inside a resistance area that is ripe for a reversal and often acts as the top for corrective movements.

The resistance area is found between $36,100-$37,200 (0.618-0.786 Fib retracement levels).

BTC Short-Term Movement
BTC Chart By TradingView

BTC Wave Count

The wave count indicates that BTC is in the C wave of an A-B-C corrective structure (shown in white below) which could take it to a low of $25,700.

An increase above the Jan. 29 high of $38,620 (red line) would invalidate this particular wave count.

The sub-wave count is shown in orange and suggests that BTC is nearing the top of sub-wave 2.

BTC Count
BTC Chart By TradingView

A closer look at the second sub-wave confirms this possibility, giving a possible target of $37,257 for the top of the move. This target also coincides with the 0.786 Fib retracement resistance from the previous section.

BTC Tiny count
BTC Chart By TradingView

Conclusion

Despite yesterday’s breakout, it’s not confirmed that the BTC trend is bullish. On the contrary, it’s still likely that BTC makes a move higher to $37,200 before breaking down.

For BeInCrypto’s previous Bitcoin (BTC) analysis, click here

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Valdrin Tahiri
Valdrin discovered cryptocurrencies while he was getting his MSc in Financial Markets from the Barcelona School of Economics. Shortly after graduating, he began writing for several different cryptocurrency related websites as a freelancer before eventually taking on the role of BeInCrypto's Senior Analyst. (I do not have a discord and will not contact you first there. Beware of scammers)
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