Bitcoin Continues Consolidating Above $36,000

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In Brief
  • Bitcoin is trading inside a symmetrical triangle.

  • Daily indicators are bearish but short-term signals are bullish.

  • BTC is likely in the X wave of a W-X-Y correction.

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The Bitcoin (BTC) price has been increasing since Jan. 12, and is currently consolidating above $36,000 inside a symmetrical triangle.

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Bitcoin is expected to find resistance at $37,700. A breakout above $40,112 would suggest that BTC is still in a bullish impulse instead of being in a corrective phase.

 

Bitcoin Continues its Ascent

Bitcoin has been increasing since bouncing at the 0.382 Fib retracement support level at $32,124 on Jan. 11. The increase has been relatively gradual and choppy, more akin to a corrective pattern than a bullish impulse.

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Despite the hidden bullish divergence in the RSI, the rest of the technical indicators from the daily time-frame are bearish. The Stochastic oscillator has made a bearish cross and the MACD has almost turned negative.

If BTC were to break down, the next closest support area would be found at $29,080 (0.5 Fib retracement).

BTC Chart By TradingView

Symmetrical Triangle

The six-hour chart shows that BTC has been trading inside a symmetrical triangle since Jan. 4. The point of convergence between support and resistance is approaching, so a decisive move is expected to occur.

There is strong resistance at $37,709. This level is the 0.618 Fib retracement level, a horizontal resistance area, and also coincides with the descending resistance line from the triangle.

Technical indicators in the short-term are bullish, but because of the bearishness from higher time-frames, we cannot confidently predict a breakout.

BTC Chart By TradingView

BTC Wave Count

The wave count suggests that BTC is trading inside a complex W-X-Y correction (shown in orange below), in which the X wave is a triangle. This also fits with the longer-term count, which suggests that BTC is correcting from the upward movement beginning in September 2020.

A breakdown from the triangle would likely take BTC to the aforementioned 0.5 Fib retracement support at $29,000, and possibly even the 0.618 Fib at $26,000. 

The sub-wave count is given in black A decrease below the B sub-wave low at $33,822 would confirm that this is the correct count.

BTC Chart By TradingView

Since this is almost definitely a triangle, the only other possibility would be this being the fourth wave, which could break upwards and take BTC toward $50,000.

However, this does not fit with the longer-term count, Unless BTC manages to break above the B sub-wave high of $40,112, this scenario is unlikely.

BTC Chart By TradingView

Conclusion

Bitcoin is expected to gradually increase to $37,700. A breakout above $40,112 would suggest that BTC is still in a bullish impulse while a decrease below $33,822 would confirm that the trend is bearish.

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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