Bitcoin (BTC) Fails Bullish Breakout and Pulls Back to Support
Bitcoin faced resistance around $ 41,250. Bitcoin bounced off the $41,250 resistance area and is now trying to find support, currently reaching an area that could cause a rebound.
Failed bullish breakout
Bitcoin (BTC) reached a high of $41,330 on June 15, after which it began to decline. This high was marked inside the important resistance area formed by the $41,250 horizontal resistance and 0.382 Fibo retracement level. The price dropped below it on May 19 and has not closed above that level since.
A bullish breakout of this level could be the catalyst for a sharp rise in BTC. However, despite the decline, technical indicators are still bullish. The MACD histogram is showing positive signals, the RSI is rising to the “50” mark, and the Stochastic Oscillator has formed a bullish crossover and is now growing. A bullish breakout could introduce the next resistance at $44,755.
On the 6-hour chart, Bitcoin has made a bullish breakout of the downtrend resistance line that has been on the chart since May 19. The subsequent decline was a test of this line’s strength as support. The Fibo level of 0.382 of the retracement also passes here, which increases the significance of this area. A similar picture can be seen in the 2-hour chart.
Bitcoin bounced off the support line of the downtrend parallel channel formed after the price reached the aforementioned high. In addition, BTC has formed a bullish hammer candlestick pattern. The earlier designated Fibo 0.382 support line also coincides with the 0.618 Fibo level of the correction in the latest section of the growth.
Indicators provide a number of signs of a bullish reversal, but they are not enough to confirm a trend reversal. However, the current level appears to be a very convenient springboard for launching a rebound.
The results of the wave analysis show that the current price action is part of the fourth wave of bearish impulse, originating from the all-time high on April 14. After wave 4 completes, there is usually a significant decline. Growth in the direction of $44,000 will complete the rollback of the fourth wave, and strengthening of BTC above the low of $47,005 will cancel this wave scenario.
The sub-wave analysis demonstrates that the current price dynamics can form an “ending diagonal triangle” pattern, which will gradually bring the price towards the assumed target level. However, to confirm such a scenario, Bitcoin must form a low immediately near the current levels.
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