Exclusive Bitcoin (BTC) Drops to Crucial Support Level Confluence

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

  • It's trading inside a short-term descending parallel channel.

  • BTC has short-term support at $31,640.

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Bitcoin (BTC) decreased considerably on July 13, resuming the descent that began the previous day and hit a low of $32,202.

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So far, BTC has continued moving downwards in the early hours of July 14. However, it’s rapidly approaching a confluence of support levels.

BTC trading range

BTC is still trading inside the range of $31,300 and $40,550 that’s been in place since May 19. Currently, it’s trading slightly above the $31,300 horizontal support area. 

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The price has been moving downwards since July 12 after it reached a local high of $34,678. The ongoing descent has caused daily time-frame indicators to turn bearish. 

The MACD has given a bearish reversal signal and the Stochastic oscillator has made a bearish cross (red icon). The RSI is also below 50. 

Therefore, daily signals are bearish.

BTC Chart By TradingView

Short-term channel

The two-hour chart shows that BTC has been trading inside a descending parallel channel since June 29. Such patterns often contain corrective structures. In addition to this, the movement inside the channel looks extremely gradual and choppy, making it unlikely that it’s part of a bearish impulse.

Technical indicators do not yet show any signs of a bullish reversal. However, the two-hour RSI is approaching oversold levels, which have initiated strong bounces over the past month (green icon). 

In addition to this, BTC is trading at a confluence of support levels at $31,640. This is the 0.618 Fib retracement support level and the support line of a descending parallel channel.

BTC Chart By TradingView

Wave count

The exact wave count is not entirely clear. BTC has been increasing since the June 22 low of $28,600. 

However, the upward movement is clearly a three wave structure. Therefore, it’s unlikely to be the beginning of a new bullish impulse and is either a completed or partial corrective structure.

BTC Chart By TradingView

However, the downward move does not look like the beginning of a bearish impulse but is likely part of a complex corrective structure. Therefore, it seems that another upward move is likely, fitting with the previously outlined parallel channel. 

BTC Chart By TradingView

The most likely count indicates that the entire movement since the June 22 low is corrective. In this possibility, the price is currently in the second portion of the correction, after which an upward move toward the range highs will transpire. 

The current price level is suitable for the initiation of a bounce, since it’s the 0.618 Fib retracement level.

A sweep of the June 26 lows at $30,082 is also possible before moving upwards seems like the most likely scenario at this point. This would cause a touch of the 0.786 Fib retracement support level.

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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