Bitcoin (BTC) is trading inside a short-term corrective pattern and technical indicators suggest that it could break out above resistance in the near future.
Bitcoin has been moving upwards since Jan. 24. The upward movement has been contained inside an ascending parallel channel. Currently, the price is in the upper portion of the channel.
So far, BTC has reached a local high of $48,181 on March 28.
The main resistance area is found at $51,000. This is a confluence of the 0.5 Fib retracement resistance level, a horizontal resistance area, and the resistance line of the channel.
Technical indicators support the continuation of the increase towards $51,000. The MACD and RSI are both increasing. The former is positive and the latter is above 50, both of which are strong signs of a bullish trend.
Channels in different time frames
The six-hour chart shows that BTC has broken out from a short-term ascending parallel channel. The price is currently in the process of validating it as support (green icon).
This is a bullish sign that suggests that higher prices are in store.
Similarly, the one-hour chart shows that BTC is trading inside an even shorter-term descending parallel channel. These channels are often considered corrective movements, meaning that a breakout from it would be likely.
This is also in line with readings from both the daily and six-hour time frames.
BTC wave count analysis
The wave count indicates that BTC is in wave C of an A-B-C structure (black). Wave B took the shape of a symmetrical triangle, from which the price broke out on March 23.
A high of $50,700 would give waves A and C a 1:1 ratio. It would also be close to the previously outlined resistance area.
The sub-wave count is shown in white, suggesting that the previously outlined channel contains wave four. After the channel is broken, BTC would be expected to initiate the fifth and final wave.