Bitcoin (BTC) Breaks Down From Ascending Channel, Testing December Lows

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In Brief
  • Bitcoin has broken down from an ascending parallel channel.

  • There is resistance at $51,600.

  • BTC is completing a corrective pattern.

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Bitcoin (BTC) has broken down from a trading pattern that had been in place since Dec 4. This indicates that BTC is still mired in a corrective pattern

Bitcoin (BTC) had been trading inside an ascending parallel channel since reaching a local low on Dec 4. While trading inside or this channel, it reached a high of $52,088 on Dec 27. 

The high served to validate the midline of the channel and the $51,600 horizontal resistance area as resistance. However, a downward move has been transpiring since.

On Dec 29, BTC broke down from the ascending parallel channel and proceeded to reach a low of $45,900. The breakdown from the channel is considered a bearish development and could lead to lower prices on the horizon.

Short-term BTC movement

The six-hour chart shows that BTC is trading just above the 0.618 Fib retracement support level at $45,850. This level coincides with the Dec 13-20 lows. 

This makes it likely for BTC to create a higher low inside the $44,145-$45,830 Fib support range before resuming its upward movement. This support range is created by the 0.618-0.786 Fib retracement support levels (white).

There are no bullish reversal signs in place at this time.

Wave count

Due to the breakdown from the channel, the wave count suggests that BTC is still mired in a corrective pattern and is likely in the X wave of a W-X-Y complex corrective structure (pink).

This wave should end between $44,100-$45,300, which is the 0.5-0.618 Fib retracement support levels (black).

Following this, an upward move toward the $55,500-$58,700 range (0.5-0.618 Fib retracement resistance levels) would be expected. This would complete the Y wave and the entire corrective structure.

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 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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