Bitcoin (BTC) has failed to initiate any sort of upward movement after breaking out from a short-term descending wedge.
Bitcoin has been increasing above an ascending support line since June 18. The line has been validated numerous times, most recently on July 26. This led to a local high of $24,668 on July 30. Throughout this period, the daily RSI, which is still above 50, has also been following an ascending support line (green).
During the upward move, Bitcoin managed to break out from the $21,750 horizontal resistance area and a descending resistance line that had previously been in place since the end of March. However, it has not yet initiated a significant upward spike. Rather, it has been retracing after the breakout.
There is a strong support level near $21,750, created by the ascending support line and a horizontal support area.
The six-hour chart does not provide any clues as to what the direction of the trend is.
Firstly, it’s possible that BTC is trading inside an ascending parallel channel, which is often considered a bearish pattern. As a result, an eventual breakdown from the pattern would be the most likely scenario. This possibility is supported by the deviation (red circle) and subsequent decline below the $23,750 horizontal area.
However, the price is still currently trading above the midline of the channel and has seemingly validated it as support. The possibility of a bullish breakout remains as long as Bitcoin is trading above this level.
Finally, the RSI is freely moving above and below 50, in what is considered a sign of a neutral trend.
So, the six-hour chart provides a neutral outlook and does not help in determining the direction of the next move.
Short-term BTC breakout
The two-hour chart shows that BTC broke out from a descending wedge on Aug. 3. The breakout occurred after the price rebounded from the 0.5 Fib retracement support level.
However, Bitcoin failed to initiate any major upward move and is back trading close to the 0.5 Fib retracement support level. This is a crucial level because the 0.618 Fib retracement support level at $22,225 could cause a bounce, but there is no horizontal support below it until $20,700.
For Be[in]Crypto’s previous Bitcoin (BTC) analysis, click here