The Bitcoin (BTC) price increased considerably on March 11, nearly reaching a new all-time high in the process.
However, Bitcoin could undergo a short-term correction before eventually resuming its upward trend.
Bitcoin Potential Double Top
BTC continued its ascent yesterday, nearly reaching a new all-time high price. However, it was stopped short at $58,150, roughly $200 below the all-time high of $58,353.
Currently, it’s trading at $56,500 — slightly below the $58,000 resistance area.
Despite the ongoing increase, it’s possible that BTC has reached a double top pattern. The double top is considered a bearish reversal pattern. This particular double top is also showing a bearish divergence in both the RSI and MACD.
Bitcoin Shows Weakness
The six-hour chart is in alignment with the daily overview.
The RSI has generated a considerable bearish divergence for three successive higher highs on BTC.
In addition, the MACD has generated one lower momentum bar.
If BTC were to decrease, the closest support levels would be found at $53,600 and $52,200.
Similarly, the two-hour chart shows BTC trading inside a parallel ascending channel, which is likely to be a corrective movement.
Currently, BTC is trading at the resistance area of this channel.
The previously outlined $53,600 and $52,200 support areas coincide with the middle and support lines of the channel respectively.
Both the RSI and MACD have generated triple bearish divergences. This is a sign of a reversal, at least in the short-term.
Wave Count For Bitcoin
The wave count suggests that BTC is in sub-wave five (orange) of wave five (white). The entire bullish impulse began in March 2020.
The most likely target for the top of the movement is found between $64,034-$66,548. The targets are found by using a combination of external Fib retracements and projections.
A decrease below $46,294 would invalidate this particular count and indicate that the correction has begun.
For the shorter-term count, click here.
Despite the long-term trend being bullish, BTC could undergo a short-term correction before resuming its upward trend.
Afterward, a new all-time high price is expected.