Oct 20 Technical Analysis: Bitcoin Could Correct Before Blast

Bitcoin (BTC) is approaching an all-time high of $ 64,854 and has so far hit a local high just below the ATH of around $ 400. While the long-term trend is bullish, there are signs of weakness.

Day outlook

The daily chart shows that the trend of BTC is bullish. On October 14th, it broke above the USD 57,200 resistance area. This is the last area of ​​resistance before hitting the all-time high. Since then, things have risen rapidly.

So far, BTC has hit a high of $ 64,486 on October 19. That’s just $ 400 off the current all-time high of $ 64,854.

Technical indicators for the daily timeframe are also bullish.

MACD is in positive territory and increasing. This means that the short term trend is moving faster than the long term trend. This is a positive sign of an uptrend.

The RSI is rising and is above 70. This supports the continuation of the uptrend.

Thus, the daily timeframe suggests that a breakout will occur and BTC will hit a new all-time high.

BTC / USDT daily chart | Source: Tradingview

Future movement

The six-hour chart shows that BTC broke out through an ascending parallel channel and then bounced off the resistance line of the channel (green symbol). This suggests the resistance line will now act as support.

However, unlike the daily timeframe, there are some signs of weakness as both the RSI and MACD create bearish divergences. This means that the rise in price is not accompanied by an increase in momentum and could lead to a correction.

BTC / USDT 6-hour chart | Source: Tradingview

A similar outlook can be seen on the 2-hour chart, which shows a more pronounced bearish divergence.

BTC / USDT 2-hour chart | Source: Tradingview

Count waves

The wave count shows that BTC is on the fifth and final wave of a bullish pulse (black). This means that after the current upward movement has finished, the price can correct itself for a period of time.

BTC is currently in the first zone, which is likely to act as the spike. This zone is created by the 1.61 length of wave one (white) and the 0.618 length of wave 1-3 (black), both of which are projected into the bottom of wave 4.

If the move continues, the next zone that can act as a top is around $ 69,000 to $ 70,000. This area is formed by a length of 2.61 of wave one (white) and a length of 1: 1 of wave 1-3 (black).

BTC / USDT 2-hour chart | Source: Tradingview

In terms of long-term wave numbers, BTC also appears to be within the long-term (red) five-year wave of a bullish impulse that began in December 2018. As a result, the upward trend has been going on for almost three years. The number of partial waves is displayed in white.

The tentative target for the top of this move is between $ 107,000 and $ 117,000. This target is found using the external fib retracement level of 2.61 of wave four (black) and the length of 1: 1.61 of waves 1-3 (red).

Such fib retracement levels are used to find resistance when prices hit all-time highs.

BTC / USDT 3-day chart | Source: Tradingview

You can see the Bitcoin price here.

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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.

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