Bitcoin Continues Consolidating Above $26,000

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In Brief
  • Bitcoin is following an ascending support line.

  • Technical indicators have begun to show weakness.

  • A decrease below $24,661 would invalidate the bullish count.

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Bitcoin (BTC) has managed to stay above the $26,000 support but has failed to initiate a significant upward movement.

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Despite there being a lack of a bullish structure, Bitcoin has managed to hold on well above support.

 

Bitcoin Weakness Could Lead to Drop

BTC followed up a shooting star candlestick from Dec. 27 by creating a small bullish candlestick the next day. This move didn’t come close to the prior day’s highs, however.

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The daily RSI has also begun to show weakness in the form of bearish divergence. However, neither the MACD nor Stochastic oscillator has generated any type of bearish signals.

BTC Chart By TradingView

The six-hour chart shows a more pronounced bearish divergence, visible in both the RSI and the MACD. In addition, we can see that BTC has been following an ascending support line, which is currently just above $25,000.

The weakness visible in both the daily and six-hour charts suggests that BTC could drop and validate this line before moving higher.

BTC Chart By TradingView

Future Movement

Lower time-frames reveals that BTC is trading above a minor support level at $26,250 (0.382 Fib retracement level). Up to this point, BTC has created a few long lower wicks that also touched the 0.5 Fib retracement level at $25,550.

So far, there are no bullish reversal signs in the two-hour time-frame. A breakdown below these support levels could trigger a sharp drop to $24,000.

However, as evidenced in the previous section, BTC is trading just above a crucial support level. This has created two long lower wicks, making it more likely that BTC bounces from the current price level.

BTC Chart By TradingView

BTC Wave Count

In yesterday’s wave count analysis, BeInCrypto stated that BTC is likely in the final sub-wave (black) of wave 5 (orange), which is expected to end near $29,800.

Despite yesterday’s decrease, the count still remains the same.

BTC Chart By TradingView

A closer look reveals that it’s possible that BTC just completed sub-wave 4 — or will do so after a slightly lower low.

However, the invalidation level of this count just above sub-wave 1 at $24,661, remains the same.

BTC Chart By TradingView

Conclusion

Bitcoin is expected to soon reverse its trend and make another attempt at creating a new all-time high price. A decrease below $24,661 would invalidate this particular scenario.

For BeInCrypto’s latest Bitcoin (BTC) analysis, click here!

Disclaimer: Cryptocurrency trading carries a high level of risk and may not be suitable for all investors. The views expressed in this article do not reflect those of BeInCrypto.

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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