Bitcoin (BTC) Makes Sixth Breakout Attempt from Descending Resistance

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In Brief
  • Bitcoin is trading inside a descending wedge.

  • It has nearly broken out from a descending resistance line.

  • There is strong resistance at $45,800.

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Bitcoin (BTC) has once again reached the resistance line of its current short-term trading pattern. At the moment, a breakout appears to be the most likely scenario.

BTC has been trading inside a descending wedge since Jan 13. The descending wedge is often considered a bullish pattern.

Up to this point, it has made five breakout attempts (red icons). Since resistances get weaker each time they are touched, a breakout from this pattern seems to be the most likely scenario. 

If this occurs, the next closest resistance area to consider would be near $43,500. This is a horizontal level that has intermittently acted as both support and resistance.

Future BTC movement

A look at the six-hour chart shows that prior to trading inside the descending wedge, BTC had broken out from a longer-term descending resistance line. Therefore, the current wedge could be considered a consolidation pattern after a breakout. 

In addition to this, the consolidation is transpiring just above the $41,200 horizontal support area. 

If BTC manages to break out from the wedge, the next closest resistance area would be found at $45,850. This target is the 0.5 Fib retracement resistance level and a horizontal resistance area.

Wave count analysis

The short-term wave count supports an upward move towards $45,950. This high would be in line with the previously outlined resistance area.

However, it’s not yet certain if the current increase is part of an A-B-C corrective structure (black) or if it is a new bullish impulse. 

In the case of the former, giving waves A:C a 1:1 ratio would lead to a high of $45,950. This seems to be the minimum target for any upward move. In the case of the latter, BTC could break through this target and move straight up towards $50,000.

The long-term count suggests that BTC is completing wave four and supports this short-term bullish move.

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

Disclaimer

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Valdrin discovered cryptocurrencies while he was getting his MSc in Financial Markets from the Barcelona graduate 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.

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