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Bitcoin (BTC) Reaches Lowest Daily Close Since 2020

2 mins
Updated by Geraint Price
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In Brief

  • BTC created a bearish engulfing candlestick on May 18.
  • There is support at $28,500 and $27,700.
  • BTC has broken down from a short-term ascending parallel channel.
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Bitcoin (BTC) has bounced at a Fib support level after breaking down from a short-term structure. The direction of the trend is still unclear.

BTC decreased considerably on May 18, creating a bearish engulfing candlestick in the process. The price reached a daily close of $28,715, which is the lowest since Dec 2020.  

While there is no horizontal support below the current price, there is slight wick support until $27,000, created by the long lower wicks of May 11 and 12.

Short-term BTC breakdown

The two-hour chart shows that the price had been trading inside an ascending parallel channel since May 13. The price finally broke down from the channel on May 18. 

The breakdown from the channel was preceded by an RSI breakdown (green line) and a decrease below 50 (red icon). Such RSI movements usually precede a similar decrease in price and increase its significance. 

Currently, bitcoin has bounced at the 0.5 Fib retracement support level at $28,500. The next closest support area is at $27,700.

Despite the breakdown, an even closer look at the movement shows that the price could be trading inside a descending wedge, which is considered a bullish pattern. 

However, it is also facing resistance from the previous support area at $29,300. As a result, bitcoin has to clear this level in order to potentially begin moving upwards.

Wave count analysis

If the price is trading inside a descending wedge, it could be possible that bitcoin is in the process of completing an ending diagonal, as outlined by the C wave (white). 

If so, the price would break out and potentially reach a high of $32,900 (black), prior to another descent.

 

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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