Back

Bitcoin (BTC) Consolidates Below $31,000 With No Clear Trend Direction

author avatar

Written by
Valdrin Tahiri

editor avatar

Edited by
Geraint Price

08 June 2022 11:00 UTC
Trusted
  • BTC has been decreasing underneath a descending resistance line since April.
  • There is a confluence of resistance levels at $31,000.
  • BTC has been trading inside an ascending parallel channel since May.
Promo

While bitcoin (BTC) has been increasing since May 12, it is not yet clear if the increase is a bullish trend reversal or a corrective bounce.

Bitcoin has been decreasing underneath a descending resistance line since April 5. The line rejected the price on May 5, eventually leading to the May 12 low.

The price has been moving upwards since, trading inside an ascending parallel channel. 

Sponsored

Yesterday it reached a confluence of resistance levels at $31,500, created by: 

  • The $31,500 resistance area
  • The descending resistance line
  • The middle of the parallel channel

Whether BTC breaks out or gets rejected could very well determine the direction of the future trend.

Short-term BTC movement

A closer look at the daily movement continues to show conflicting signs. 

Sponsored

On the bullish side, bitcoin created a long lower wick on June 7 (black icon), validating the support line of the channel. Additionally, the RSI has generated considerable bullish divergence.

On the bearish side, the divergence trendline is very close to breaking down and the RSI has been rejected twice by the 50 line.

The two-hour chart shows a descending parallel channel and an RSI that has been freely moving above and below 50. 

Sponsored

So it does nothing to help determine the direction of the future trend.

Wave count analysis

There are two main potential wave counts in play. 

The first suggests that the price is completing a five-wave downward movement since April. It has just completed wave four and will soon drop to finish wave five.

Sponsored

The second suggests that wave five is truncated instead, and bitcoin is completing an upwards correction. 

Whether the price manages to break out from the $31,500 area or gets rejected will likely determine which of the counts is true.

For Be[in]Crypto’s previous bitcoin (BTC) analysisclick 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.