Bitcoin (BTC) Recovers Above $ 40,000 After Record Collapse
Bitcoin (BTC) experienced a massive crash on May 19, crashing from open levels in the $ 43,000 region to $ 30,000 lows.
However, later bitcoin was able to make a strong rebound, forming a long lower wick (22%).
However, later bitcoin was able to make a strong rebound, forming a long lower wick (22%).
BTC bounced off support
Bitcoin (BTC) plummeted yesterday, hitting a low of $ 30,000. The market tested this area again as support. The previous time the price reached $ 30,000 on January 27, 2021.
On the same day, BTC rebounded vigorously from this area, forming a long lower wick (22%) on the chart.
Despite the rebound, technical indicators are not signaling a bullish reversal yet.
Resistance is marked at $ 41,430 (Fibo 0.382 retracement) and more significant - at $ 48,330 (Fibo 0.618 retracement of the recent decline and the area of horizontal resistance).
The weekly chart underscores the importance of the rebound as it occurred between the 0.5-0.618 Fib levels of the correction of the entire bullish move from the bottom of March 2020.
However, just like on the daily chart, the indicators are showing a bearish mood. The Stochastic Oscillator has formed a bearish crossover for the first time since September 2019. The MACD is also giving bearish reversal signals, and the RSI is currently just around the 50 mark. The index has not dipped below it since April 2020.
Bitcoin (BTC) plummeted yesterday, hitting a low of $ 30,000. The market tested this area again as support. The previous time the price reached $ 30,000 on January 27, 2021.
On the same day, BTC rebounded vigorously from this area, forming a long lower wick (22%) on the chart.
Despite the rebound, technical indicators are not signaling a bullish reversal yet.
Resistance is marked at $ 41,430 (Fibo 0.382 retracement) and more significant - at $ 48,330 (Fibo 0.618 retracement of the recent decline and the area of horizontal resistance).
The weekly chart underscores the importance of the rebound as it occurred between the 0.5-0.618 Fib levels of the correction of the entire bullish move from the bottom of March 2020.
However, just like on the daily chart, the indicators are showing a bearish mood. The Stochastic Oscillator has formed a bearish crossover for the first time since September 2019. The MACD is also giving bearish reversal signals, and the RSI is currently just around the 50 mark. The index has not dipped below it since April 2020.
Bitcoin (BTC) Recovers Above $ 40,000 After Record Collapse
What's next
In yesterday's price dynamics, attention is drawn to the ratio of the decline from the historical high on April 14 (A) and the move that began on May 10 (C).
This ratio is 1: 1.61, which is typical for such corrective structures. However, this is also a common 1: 3 ratio between waves, and this could mean that we are dealing with bearish momentum.
Nevertheless, the most likely scenario continues to be the option according to which this decline is a correction.
This will be confirmed if the price rises above the $ 47,004 low (red line). Also, such a move will clear the way for the BTC rate to new highs.
In yesterday's price dynamics, attention is drawn to the ratio of the decline from the historical high on April 14 (A) and the move that began on May 10 (C).
This ratio is 1: 1.61, which is typical for such corrective structures. However, this is also a common 1: 3 ratio between waves, and this could mean that we are dealing with bearish momentum.
Nevertheless, the most likely scenario continues to be the option according to which this decline is a correction.
This will be confirmed if the price rises above the $ 47,004 low (red line). Also, such a move will clear the way for the BTC rate to new highs.
Long-term analysis of BTC
The most likely scenario assumes that the market is still in the first phase of decline. Since we are probably dealing with long-term wave 4 (red), the retracement may take the shape of a triangle pattern.
A variant with a flat correction is also possible, but both scenarios still offer an identical first phase of the movement (A and B).
Wave B (orange) is expected to rise to at least Fibo 0.618, retracement of $ 51,775, and possibly to $ 60,000.
The correction assumes the end of the growth phase that began in March 2020. Accordingly, Bitcoin is now inside wave 4 (red), which, as noted above, may develop into a triangle.
Considering the time spent by the market for the completion of wave 2, we can assume that the current correction may continue at least until the end of July, and possibly until November.
The most likely scenario assumes that the market is still in the first phase of decline. Since we are probably dealing with long-term wave 4 (red), the retracement may take the shape of a triangle pattern.
A variant with a flat correction is also possible, but both scenarios still offer an identical first phase of the movement (A and B).
Wave B (orange) is expected to rise to at least Fibo 0.618, retracement of $ 51,775, and possibly to $ 60,000.
The correction assumes the end of the growth phase that began in March 2020. Accordingly, Bitcoin is now inside wave 4 (red), which, as noted above, may develop into a triangle.
Considering the time spent by the market for the completion of wave 2, we can assume that the current correction may continue at least until the end of July, and possibly until November.
Conclusion
Thus, Bitcoin is likely in a long-term corrective wave. This will be confirmed if the price rises above $ 47,000. In this case, the price may continue to consolidate until the end of July.
Thus, Bitcoin is likely in a long-term corrective wave. This will be confirmed if the price rises above $ 47,000. In this case, the price may continue to consolidate until the end of July.
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