Exclusive Bitcoin (BTC) Struggles To Sustain Rally After Breakout

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In Brief
  • Bitcoin has broken out from a descending resistance line

  • Daily technical indicators are gradually turning bullish.

  • BTC is potentially trading inside a short-term descending parallel channel.

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The price of bitcoin (BTC) has been increasing since May 19 but is struggling to sustain the upward movement.

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The creation of a higher low near the current price level is essential for the continuation of the upward trend

BTC struggles to sustain rally

BTC has been increasing since May 19, when it reached a low of $30,000. It managed to reach a local high of $40,841 on May 26. However, it has been falling since.

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Despite the drop, technical indicators are turning bullish. The MACD has given a bullish reversal signal and created four successive higher momentum bars. The RSI is increasing, looking to make its second higher low. Finally, the Stochastic oscillator is showing signs of moving upwards. 

BTC Chart By TradingView

Ongoing BTC breakout

The six-hour chart shows a breakout from a descending resistance line. While the rally could not be sustained, BTC is still trading above this line, potentially validating it as support.

There are resistance levels at $41,200 and $41,850. These are the respective 0.382 and 0.618 Fib retracement levels.

BTC Chart By TradingView

The one-hour chart shows that throughout the ongoing decrease, BTC has been trading inside a descending parallel channel. This could be a corrective movement.

The price is currently trading right at the support line of the channel. It previously touched the 0.5 Fib retracement support level at $36,000. 

Thus, if the rally is to continue, the creation of a higher low is crucial at these levels.

Chart By TradingView

Wave count

The most likely wave count indicates that the previous decrease is an A-B-C corrective structure, in which waves A:C had a 1:1.61 ratio.

This would be confirmed by an increase above the A wave low at $47,004 (red line) and would fit with the long-term BTC count.

BTC Chart By TradingView

However, there is a possibility that the decrease was a bearish impulse and BTC is now in wave four. 

If this is the case, the price could be trading inside a symmetrical triangle. For that reason, it might fall towards the $33,000 region before bouncing once more.

BTC Chart By TradingView

As a result, the decrease could continue towards $27,152, the long-term 0.618 Fib retracement support level. 

Therefore, the current short-term movement is crucial, since a fall towards the $33,000 levels could indicate that the longer-term correction is not over yet.

BTC Chart By TradingView

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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