Bitcoin (BTC) has returned to its previous support area and may be in the early stages of creating a short-term upward pattern.
The daily chart shows that BTC is still floating above the horizontal support area of $ 56,500. This is the .382 fib retracement support and the horizontal support. BTC recovered from this zone on November 19th and has now returned there.
However, the technical indicators in the daily timeframe are falling.
The MACD, formed by the short and long term moving averages (MAs), is bearish and is about to cross negative territory. This means that the short-term MA is moving more slowly than the long-term MA.
The RSI, a momentum indicator, has fallen below 50. This move is usually associated with a downtrend. For the uptrend to continue, the RSI needs to restore that 50 line.
If there is a breakdown, the next support is found at $ 53,250. This is the 0.5 fib retracement support.
BTC / USDT daily chart | Source: TradingView
Potential double floor
The six-hour chart shows that BTC is developing a possible double bottom. This is a bullish pattern that often leads to a reversal.
In addition, it has been linked to a bullish divergence in both the RSI and the MACD. This occurs when the price decline is not accompanied by a decline in technical indicators and often leads to a bullish reversal.
If BTC reverses there will be strong resistance at $ 60,730. This is the .382 fib retracement resistance and the horizontal resistance range. In addition, it coincides with a possible descending resistance line since the all-time high.
BTC / USDT 6-hour chart | Source: TradingView
The wave count shows that the decline since October 20 is an ABC correction (red) that completes the longer-term wave 2 (black).
Since wave A: C has a ratio close to 1: 1.61, it is likely that BTC is close to or has hit a local low.
The number of long-term waves is bullish, which shows that BTC is in a large 1-2 / 1-2 wave formation.
The alternate short-term wavenumber is tending to decline over the medium term, but it still suggests that it can move up to $ 62,400- $ 64,000 before another decline occurs.
BTC / USDT 12-hour chart | Source: TradingView
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Disclaimer: This article is for informational purposes only, not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.
According to Beincrypto