Exclusive Bitcoin (BTC) Resumes Ascent Toward Resistance Zones

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In Brief
  • Bitcoin has created a bullish engulfing candlestick.

  • BTC is facing resistance at $41,200.

  • The price has broken out from a short-term descending resistance line.

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The bitcoin (BTC) price has created a higher low after the May 19 crash and is currently approaching the first significant resistance area found at $41,200.

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Bitcoin bounces above support

After reaching a local low of $30,000 on May 19, BTC bounced considerably. It created a higher low on May 23 and followed it up with a bullish engulfing candlestick the next day.

So far, it has reached a high of $39,791. This is very close to the 0.382 Fib retracement resistance found at $41,201. The next resistance would likely be found at $48,170.

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Technical indicators are showing bullish signs. While the Stochastic oscillator is still bearish, the RSI has generated a bullish divergence and crossed above 30. 

In addition, the MACD has created the first higher momentum bar, potentially signaling a bullish reversal.

BTC Chart by TradingView

Short-Term Movement

The two-hour chart is a bit more bullish. 

Firstly, it shows a descending resistance line from which BTC has broken out. Secondly, the MACD is positive and the RSI has crossed above 50 (green icon). Both of these are bullish signs. 

On the other hand, the $41,200 area looks to be a horizontal resistance level as well as a Fib resistance.

BTC Chart by TradingView

BTC Wave Count

The wave count indicates that BTC has completed cycle wave three (red) and is now in cycle wave four. This means that the portion of the upward movement that began in March 2020 has now ended. 

The most likely corrective structure would be a symmetrical triangle. 

The sub-wave count is shown in white. 

Considering that the length of the cycle wave two correction was 260 days, we would expect a corrective period of at least half that, which would mean a correction that lasts until the end of August.

BTC Chart by TradingView

Conclusion

Bitcoin is expected to resume its upward movement. A short-term rejection could occur once $41,200 is reached.

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