Exclusive Bitcoin (BTC) Consolidates Inside Range With No Clear Direction

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In Brief
  • Bitcoin is trading in a long-term range between $31,300 and $40,550.

  • BTC is trading inside two short-term descending parallel channels.

  • The wave count is unclear.

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Bitcoin (BTC) has been decreasing since June 29 and created a lower high on July 5.

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BTC is currently trading inside two short-term parallel channels, and has already bounced at their support lines. A breakdown from these channels would be an extremely bearish development.

Bitcoin trading range

Bitcoin decreased considerably on July 8, reaching a low of $32,077 in the process. However, it bounced back and created a relatively long lower wick.

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Technical indicators are still undecided. The RSI is just below the 50-line, the MACD is still positive but has lost strength, and the Stochastic oscillator is undecided between making a bullish and bearish cross. 

The long-term range since May 19 is still in place. The support and resistance levels are found at $31,300 and $40,550, respectively. The latter is the 0.382 Fib retracement resistance level.

BTC Chart By TradingView

Short-term movement

The two-hour chart shows two descending parallel channels, one long (black) and the other short (white) term. Parallel channels often contain corrective movements. 

On July 8, BTC bounced at the confluence of the support lines of these two channels (green icon). 

In addition to this, the short-term MACD is moving upwards. Therefore, the current price level is a very suitable level to initiate a bounce. 

If BTC were to break down, the next support level would be found at $30,500. 

However, a breakdown could also mean that the downward movement is impulsive and could lead to a breakdown of the range and new lows.

BTC Chart By TradingView

Wave count

The exact wave count is still unclear. 

Due to the presence of the channels, it’s possible that this is the X wave of an W-X-Y corrective structure. 

In the Y wave, BTC could move back toward the range highs.

BTC Chart By TradingView

On the other hand, the bearish count indicates that BTC is still in a bearish impulse. 

This seems extremely likely after the breakdown from the long-term ascending parallel channel.

However, the lack of a sharp downward movement after the breakdown has cast some doubt.

The only way for this count to remain valid is if the movement is a series of 1-2/1-2 wave formations.

If this transpires, it could lead to lows near $19,000.

BTC Chart By TradingView

For BeInCrypto’s latest 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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