The Bitcoin (BTC) price increase that has been ongoing since April 18 stalled on April 20 as it hit a wall and was rejected by the 0.382 Fib retracement resistance level.
Bitcoin has been increasing above an ascending support line since Jan. 24. The line has been validated numerous times, most recently on April 18 (highlighted), when the price created a bullish engulfing candlestick.
The increase led to a local high of $42,199 on April 20, when BTC was rejected. The rejection occurred right at the 0.382 Fib retracement resistance level.
If the upward movement were to continue, there would likely be strong resistance at $44,550 which is the 0.618 Fib retracement resistance level. This area also coincides with a descending resistance line (dashed).
Short-term BTC reclaim
The six-hour chart shows that prior to the upward move, the RSI generated a considerable bullish divergence (green line).
BTC followed this up by reclaiming the $41,250 horizontal area that had previously acted as resistance (red icon) and has now seemingly turned to support (green icon).
The short-term trend can be considered bullish as long as BTC is trading above it.
Wave count analysis
There are two main possibilities for the wave count.
The first suggests that BTC has just completed sub-wave four (yellow), and will now decrease toward $37,000. This would give the longer-term waves A and C an exact 1:1 ratio and validate the support line of an ascending parallel channel.
The second possibility suggests that BTC has completed a five-wave downward correction (yellow) and has now begun an A-B-C corrective structure to the upside. After another short-term drop, BTC could continue its upward movement towards $44,000.
Both possibilities indicate that at least one more short-term drop will occur.
For BeInCrypto’s previous Bitcoin (BTC) analysis, click here
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