The bitcoin (BTC) price briefly fell below $54,000 in the early hours of March 16.
Despite the drop, a bounce is already underway. Furthermore, it’s possible that BTC has already reached a local bottom.
Divergence Spells Weakness
The price has been moving downwards since March 13 when it reached a new all-time high price of $61,781. Since then, it’s reached a local low of $53,221 on March 16.
The ongoing drop was preceded by a significant bearish divergence in the MACD, RSI, and Stochastic oscillator.
However, since a significant drop has occurred, it’s possible that the divergence has already played out.
The MACD is still positive, the RSI is above 50, and the stochastic oscillator has made a bullish cross.
Short-Term Movement For BTC
The two-hour chart shows an ascending support line. This line has been followed since the beginning of March.
BTC has just returned to the line for the fourth time and initiated a bounce. The line also coincides with the short-term support area at $54,565.
There are no clear bullish reversal signs. However, the RSI has dropped into oversold territory. Previously, this has been followed by an upward movement.
If a breakdown were to occur, the next support area would be found at $51,500. Though, at the time of press, this does not seem likely.
The one-hour chart is more bullish and shows a pronounced bullish divergence in both the MACD and RSI.
If BTC manages to clear the 0.5 Fib retracement level resistance at $57,500, it would likely confirm that the trend is bullish.
BTC Wave Count
The wave count suggests that BTC has now begun sub-wave five (black) of wave five (orange).
A potential target for the top of the movement is found near $68,000.
The recent drop did not touch the top of sub-wave one at $52,652. Therefore, the wave count is still valid.
For the longer-term wave count, click here.
Conclusion
The ongoing bounce that BTC is experiencing is expected to continue. The price is expected to reclaim the resistance at $55,500.
For BeInCrypto’s previous bitcoin (BTC) analysis, click here.
Disclaimer
In line with the Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate, unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult with a professional before making any financial decisions. Please note that our Terms and Conditions, Privacy Policy, and Disclaimers have been updated.
