Bitcoin (BTC) Negates Gains With Bearish Engulfing Candlestick

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In Brief
  • BTC created a bearish candlestick on June 16.

  • The short-term RSI is bullish.

  • BTC has created a short-term double bottom pattern.

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Bitcoin (BTC) decreased sharply creating a bearish engulfing candlestick and nearly falling to a new yearly low.

BTC created a bullish hammer candlestick (green icon) after eight successive bearish daily candlestick closes. This suggested that it has possibly initiated a bullish reversal.

However, it negated almost the entirety of the drop the next day by creating a bearish engulfing candlestick and falling towards its low on Wednesday. 

Also, while the RSI is extremely oversold, it has not generated any sort of bullish divergence. 

So, the daily time frame does not provide any definitive signs for a bullish reversal.

Potential bounce

The six-hour chart provides a slightly more bullish outlook. The two main reasons for this are the creation of a double bottom pattern and the movement of the RSI. 

The RSI has already broken out from a descending trendline and generated bullish divergence afterwards. Additionally, it is currently moving above the 30 line, getting out from its oversold territory.

If the double bottom gets confirmed, the closest resistance area for bitcoin would be at $24,600, created by the 0.382 Fib retracement resistance level. Afterward, there would be stronger resistance at $26,000, the 0.5 Fib retracement resistance level and a descending resistance line in place since June 6.

BTC wave count analysis

The short-term wave count shows that it is possible that BTC has completed a five-wave downward movement (black). The decrease began in the end of April.

The current low has been made at a confluence of Fib levels between $21,850 and $22,650. These are given by the 1.61 external Fib retracement of wave four (black) and the length of wave one (white).

So, it is possible that a bottom is very close or has already has been made.

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