Bitcoin (BTC) continues to consolidate near ,000 in an unclear trend

Bitcoin (BTC) continues to consolidate near $24,000 in an unclear trend

Bitcoin (BTC) is trading inside a short-term corrective pattern. The direction of the short-term trend is not yet clear.

On July 18, Bitcoin broke through a descending resistance line that had been in place since the end of March. The reaction after the breakout was relatively weak: Bitcoin did not even reach the Fibonacci retracement resistance level of 0.382 at $29,370.

While BTC hit a local high of $25,211 on Aug 15, it created a long upper wick (red icon) and has been falling ever since.

More importantly, the bullish divergence trend line on the daily RSI (green line) that preceded the up move has now been broken. This is a signal that often precedes price declines.

If BTC continues to drop, the closest support area would likely be found at $21,550.

short-term pattern

The six-hour chart shows that BTC is trading inside an ascending parallel channel since hitting a low on June 18. Such channels generally contain corrective movements, which means that an eventual collapse would be expected.

Bitcoin was rejected by the resistance line of the channel on August 15 (red icon) and has been falling ever since.

If it breaks down from the (dashed) short-term ascending support line, a decline towards the aforementioned $21,500 support area would be expected. This zone also coincides with the support line of the channel.

BTC Wave Count Analysis

There are two short-term potential wave counts for the future trend.

The first suggests that BTC began a five-wave (black) up move on July 13 and is currently in wave three. The secondary wave count is shown in yellow, where Bitcoin appears to be in secondary wave three. For this possibility to remain valid, the price must stay above the slope of the current ascending support line.

The second short-term count suggests Bitcoin has completed wave five of a main diagonal, thus forming the rising wedge. In this case, a breakout of the wedge and a subsequent decline towards the 0.5-0.618 Fibonacci retracement support levels between $20,500 and $21,400 would be expected before the continuation of the up move.

To conclude, both the short-term counts and the most likely long-term wave count suggest that the bottom has already been reached.

To be[in]Previous Bitcoin (BTC) Analysis of Crypto, Click Here

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