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Bitcoin (BTC) Struggles to Sustain Rebound Rally Above $40,000

2 mins
Updated by Kyle Baird
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In Brief

  • Bitcoin is following an ascending support line.
  • It has broken down from a descending parallel channel.
  • Long-term indicators are bearish but short-term signal are showing bullish signs.
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Bitcoin (BTC) rebounded at a minor diagonal support level near $40,000 but could still test the primary support zone between $37,000 and $38,000.

Bitcoin has been decreasing since March 28 and dropped to a local low of $39,200 on April 11.  

It’s possible that BTC bounced at an ascending support line (solid) that has been in place since Jan. 22.

However, technical indicators are bearish. The RSI has broken down from an ascending support line and is currently below 50. The RSI is a momentum indicator and readings below 50 are a sign of bearish momentum.

In addition to this, the previous time this indicator decreased below 50 (red icon), it led to a month-long dip to the January lows at $32,917. 

If BTC breaks down again, the next ascending support line (dashed) would be found at $37,500. 

Channel breakdown

The two-hour chart shows that BTC has broken down from a descending parallel channel. It validated the channel as resistance on April 11 (red icon) before accelerating to the downside. 

If the downward movement continues, the closest support area would be found near $37,800.

Unlike the daily RSI, the two-hour RSI is showing bullish signs. Apart from generating a bullish divergence (green line), it’s at its most oversold level since January. 

However, the price action does not show any bullish reversal signs.

BTC wave count analysis

The long-term wave count suggests that an eventual upward move toward $50,000 is expected. However, BTC could still make another short-term low prior to doing so. 

The most likely short-term count suggests that the ongoing decrease is an A-B-C corrective structure (black). Giving waves A and C a 1:2.61 ratio would lead to a low of $37,110. The sub-wave and minor sub-wave counts are shown in red and yellow, respectively.

The potential $37,100 target would also take BTC all the way down to the support line of a potential ascending parallel channel.

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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