Bitcoin (BTC) has been in a retracement since July 30, but is trading within a short-term bullish pattern and has reached near-term support.
The daily chart shows that Bitcoin has broken out of a descending resistance line previously in place since late March. Bitcoin broke out on July 18 but has not risen significantly since then.
However, BTC has broken out of the $21,750 horizontal area and validated it as support thereafter and the daily RSI has moved above 50.
There is a slight bearish divergence now developing on the RSI (green line). This could lead to a short-term retracement towards the horizontal $21,750 area before any upside continuation. The next closest resistance area is at $29,370. This target is the 0.382 Fib retracement resistance level.
Short term movement
The six-hour chart shows that BTC could still be following an upward support line formed in mid-June. The line is currently intersecting near $21,800, aligning with the horizontal support area described earlier.
There is also Fib support between $22,250 and $22,700, created by the 0.5-0.618 Fib retracement support levels.
The two-hour chart shows that Bitcoin has been trading in a bearish wedge since reaching its local highs on July 30. A descending wedge is often considered a bullish pattern, meaning that a breakout from it is likely.
BTC Wave Count Analysis
The most likely wave number indicates that Bitcoin has started wave three of a five-wave uptrend (yellow). If correct, a significant increase is likely, as wave three is usually the sharpest and longest of wave five.
The subwave count is shown in black and indicates that the price is completing the second subwave, after which a sharp rise could follow.
Since this appears to be one 1-2/1-2 wave formation. A decline below the rising support line and the 0.618 Fib retracement support level at $22,230 would invalidate this particular number.
For Be[in]Crypto’s previous Bitcoin (BTC) analysis, click here
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