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Bitcoin (BTC) Reaches First Ever Close Below 50-Month Moving Average (MA)

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Written by
Valdrin Tahiri

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Edited by
Geraint Price

01 July 2022 15:45 UTC
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  • BTC has reached a close below its 50-month MA.
  • It is following a short-term descending resistance line.
  • There is short-term support and resistance at $19,250 and $20,000.
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Bitcoin (BTC) created its first higher low since June 18, but has yet to break out from a horizontal and diagonal resistance level.

BTC has been falling since reaching an all-time high price of $69,000 in Nov. The downward movement has so far led to a low of $17,592 in June 2022. 

The price has reached a monthly close below its 50-month moving average (MA) (orange). Previously, the MA has been crucial in initiating bounces, thus acting as the bottom after sharp falls (green icon). 

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However, that was not the case in June, since the price reached a close of $19,924 while the MA is at $21,600. Its reclaim is crucial if the bullish trend is to continue.

Short-term movement

The six-hour chart shows that BTC has created its first higher low since June 18. The higher low was made at the 0.618 Fib retracement support level at $19,250. 

Additionally, while it seemed that the RSI had broken down from its bullish divergence trend line, it has now reclaimed it, rendering the previous decrease as only a deviation.

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Despite this seemingly bullish development in the six-hour time frame, the two-hour one provides the exactly opposite reading, since the price has deviated above the $20,000 horizontal resistance area and a descending resistance line that has been in place since June 26.

Until these levels are reclaimed, the trend cannot be considered bullish.

Resistance line
BTC/USDT Chart By TradingView
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BTC wave count analysis

There are still several possibilities for the long-term wave count. On the other hand, there are two main possibilities for the short-term count. 

The bullish outlook indicates that the price has completed an A-B-C corrective structure. So, the upward movement is now expected to continue.

Waves A:C have had a 1:1.61 ratio, which is common in such structures.

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The bearish count indicates that the entire downward movement since the beginning of June is part of wave four (white) of a five-wave downward movement. So, in this case, the price would fall towards $16,000 before eventually reversing.

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Whether the price manages to reclaim the previously outlined short-term resistance levels will likely determine which is the correct count.

For Be[in]Crypto’s previous bitcoin (BTC) analysis, click here

Disclaimer

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