Bitcoin (BTC) continued its decline on July 15th, falling as low as $ 31,113. This resulted in further confirmation in the USD 31,300 support area.

It is currently trading within a short-term descending parallel channel which appears to be the most likely scenario to break out.

Bitcoin returns to support

On July 15, BTC hit a low of $ 31,113. It did so because of a large bearish candle that invalidated the July 14th bullish hammer candle. BTC touched the horizontal support area of ​​$ 31,300 (green symbol) for the sixth time.

Technical indicators are falling. The MACD has shown a bearish reversal signal, the RSI is below 50 and the stochastic oscillator has created a bearish cross.

The next resistance is at $ 40,550. That target is both the .382 fib retracement resistance level and the horizontal resistance area.

BTC / USDT daily chart | Source: TradingView

Short-term channel Kênh

The six-hour chart shows that BTC has been trading in a descending parallel channel since June 29th.

On July 15, it hit the support line of this channel for the third time and rebounded (green symbol). However, the touch was below the 0.618 Fib retracement support and above the 0.786 Fib mark. Hence, BTC does not have a fib support that coincides with the channel support to increase its strength.

While the RSI has produced some bullish divergences, the MACD is still falling.

BTC / USDT 6-hour chart | Source: TradingView

Future movement

There are two main wave scenarios. The first scenario suggests a bearish momentum (orange) has completed, measured from the all-time high of April 14th.

The fact that price broke above the line connecting the top of wave 2-4 implies that BTC is no longer in wave five. Thus, the first scenario suggests that a bearish impulse has completed and BTC is currently correcting upwards.

BTC / USDT daily chart | Source: TradingView

The second scenario shows that BTC is still in a fourth wave and further decline. While the long-term trend is different, the short-term trend is the same in both scenarios.

BTC / USDT daily chart | Source: TradingView

Since parallel channels often contain corrective moves, BTC is likely to bounce off the channel’s support line and move to the top of the range.

The reaction when the price gets there will help determine whether BTC is still in wave four or has completed wave five.

BTC / USDT 6-hour chart | Source: TradingView

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.

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