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Bitcoin (BTC) Falls to Support Zone Of Consolidation Pattern; Will It Break Down?

2 mins
Updated by Kyle Baird
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In Brief

  • Bitcoin is trading under descending resistance line.
  • It's at risk of breaking down from a short-term ascending parallel channel.
  • BTC short-term RSI is bearish.
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Bitcoin (BTC) is close to breaking down from a corrective pattern that had been in place since June 18. If this occurs, it would be expected to lead to new lows.

Bitcoin has been falling underneath a descending resistance line since the end of March. The line caused a rejection on June 7, which led to a local bottom of $17,622 on June 18. 

The price increased slightly since and created two higher lows. However, it failed to even reach the descending resistance line and was instead rejected by the $21,700 horizontal resistance area. 

The daily RSI has yet to move above 50 and was rejected by the line the same time as the price was rejected by the $21,700 horizontal level. On the other hand, the RSI is still holding on above its ascending trendline (green). A breakdown from the line would likely confirm that the price is heading lower.

BTC Descending resistance
BTC/USDT Chart By TradingView

Short-term breakdown

A closer look at the six-hour chart paints a mostly bearish outlook. 

Firstly, the price has been trading inside an ascending parallel channel since June 18. Such channels usually contain corrective structures, meaning that an eventual breakdown would be expected. 

Secondly, the six-hour RSI has broken down from its ascending trendline and is below 50. 

Short-term channel
BTC/USDT Chart By TradingView

BTC wave count

The wave count suggests that BTC has been trading in a five-wave downward move (yellow) since the end of March. The presence of this structure makes it likely that BTC is currently in wave four. 

If it breaks down, a likely target for the bottom would be found at $16,725. This target is found using the 0.382 length of waves 1-3.

Short-term count
BTC/USDT Chart By TradingView

The long-term wave count suggests that BTC is in the C wave of an A-B-C corrective structure (red) that has been developing since the all-time high of $69,000 was reached in November 2021. 

Giving waves A and C a 1:1 ratio would lead to a long-term low of $12,100, given that the $16,726 level fails.

BTC Long-term count
BTC/USDT Chart By TradingView

For Be[in]Crypto’s previous bitcoin (BTC) analysisclick here.

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Disclaimer

In line with the Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate, unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult with a professional before making any financial decisions. Please note that our Terms and ConditionsPrivacy Policy, and Disclaimers have been updated.

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Valdrin Tahiri
Valdrin discovered cryptocurrencies while he was getting his MSc in Financial Markets from the Barcelona 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. (I do not have a discord and will not contact you first there. Beware of scammers)
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