Bitcoin Breaks Out but Bullish Trend Still Unconfirmed

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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.

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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.

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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 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 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 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 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

Disclaimer

All the information contained on our website is published in good faith and for general information purposes only. Any action the reader takes upon the information found on our website is strictly at their own risk.
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Valdrin is a cryptocurrency enthusiast and financial trader. After obtaining a masters degree in Financial Markets at the Barcelona Graduate School of Economics he began working at the Ministry of Economic Development in his native country of Kosovo. In 2019, he decided to focus full-time on cryptocurrencies and trading.

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