Exclusive Bitcoin (BTC) Bounces Back After Sharp Drop

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In Brief
  • Bitcoin is following a short-term ascending support line.

  • There are multiple bearish divergences in the daily time-frame.

  • There are support levels at $54,500 and $51,500.

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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.

BTC Chart By TradingView

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.

BTC Chart By TradingView

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 Chart By TradingView

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.

BTC Chart By TradingView

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

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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