Bitcoin (BTC) continued its ascent on Jan. 6 and 7, this time reaching yet another all-time high at $37,800.
Despite a lack of weakness from technical indicators, the wave count suggests that Bitcoin is nearing the top of its move, with a possible target near $39,100.
Bitcoin Reaches Another All-Time High
BTC created yet another bullish candlestick on Jan. 6, reaching the highest daily close ever at $36,849. It continued its ascent the next day, to hit a high of $37,800.
Despite being overbought, technical indicators do not yet show any weakness.
Future Movement
The six-hour chart shows the first signs of weakness in the form of a bearish divergence in both the RSI and MACD. However, the divergence is only visible in time-frames of six hours and lower.
Furthermore, there is a support area found at $34,500, which BTC has validated. As long as it is trading above this area, BTC is expected to continue moving upwards.
BTC Wave Count
The wave count suggests that BTC is likely nearing the top of its upward movement. It’s possibly in sub-wave 5 of a longer-term wave 5, as outlined in yesterday’s article.
A likely target for the top of sub-wave 5 (shown in orange below) is located between $39,130-$39,170. The target is found by projecting the length of sub-waves 1-3 (black fib) and an external retracement on sub-wave 4.
An even closer look at the movement shows that BTC is likely in minor sub-wave 5 (shown in black below) of sub-wave 5.
Therefore, a decrease below the minor sub-wave 4 low at $34,330 (red line) would likely mean that the upward movement is over and BTC is correcting.
Conclusion
While Bitcoin is expected to continue increasing, the $39,100 area could possibly act as the top of the upward movement.
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