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Bitcoin (BTC) Price Whipsaws and Creates 9% Long Lower Wick After Rebounding

2 mins
Updated by Kyle Baird
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In Brief

  • Bitcoin has bounced at the $34,400 horizontal support area.
  • There is strong resistance at $39,550.
  • BTC has completed a short-term five-wave downward move.
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Bitcoin (BTC) increased considerably on Feb 24, reaching a high of $39,843 prior to being rejected. Reclaiming the $39,850 area is crucial for the continuation of the upward movement.

Bitcoin initially fell on Feb 24, reaching a low of $34,332. However, it bounced back immediately after and created a very long lower wick with a magnitude of 8.60%. In addition to this, the bounce served to validate the $34,400 horizontal area as support. 

The bullish candlestick with a long lower wick has is very similar to that of Jan. 24 (green icons), after which BTC initiated a significant upward move. As a result, it’s possible that a similar pattern will emerge this time around.

Divergence precedes bounce

The six-hour chart shows that the bounce was preceded by very considerable bullish divergences (green line) in both the RSI and MACD. 

Such divergences often precede upward movements, as was the case in yesterday’s BTC movement. This occurrence strengthens the validity of a potential trend reversal.

The two-hour chart shows that BTC is facing strong resistance at $39,550. This is the 0.5 Fib retracement resistance level, a horizontal resistance area, and also a range that coincides with the support line of a previous descending parallel channel. 

The area rejected the price on Feb. 24, creating a long upper wick.

Therefore, reclaiming it is crucial in order for the trend to be considered bullish.

BTC wave count analysis

The wave count shows that BTC has completed a short-term five-wave downward move that ended with yesterday’s low. In many cases, what follows is an upwards corrective structure. 

As it stands, the most likely scenario suggests that the price is in the process of completing the A wave of an A-B-C corrective structure. 

After this, another brief downward move could transpire.

For BeInCrypto’s previous Bitcoin (BTC) analysis, click 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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