Bitcoin (BTC) has likely hit a short-term local high and is currently correcting towards support.

Day outlook

Bitcoin hit an all-time high of $ 69,000 on November 10, but fell almost immediately afterwards, hitting a low of $ 62,982 that same day.

The decline preceded falling divergence in both RSI and MACD. This usually heralds a downward trend reversal. In addition, the decline was associated with a significant increase in volume (red symbol), the highest level since October 27th.

When a trend reversal occurs, the next support is at $ 57,750 and the zone between $ 53,770 and $ 54,250.

The first level is the short term 0.382 fib retracement support (white). While the following zone is formed by the short-term support of 0.5 Fib and the long-term support of 0.382 Fib (black).

BTC / USDT daily chart | Source: TradingView

Short term support

The six-hour chart is showing a large bearish candle that emerged after the decline. This is a type of bearish candle where the previous bullish candle is completely engulfed in the other direction by a larger real body. It continues to support BTC’s ability to keep falling.

Additionally, BTC broke the $ 66,300 area intended to serve as support. It hit the USD 63,500 support area before bouncing up (green icon). This area will soon coincide with the ascending support line formed since October 25th.

So there is strong support from the USD 63,500 support area and the ascending support line.

BTC / USDT 6-hour chart | Source: TradingView

Count waves

The wavenumber also supports the possibility that BTC has hit a local high. It shows that BTC has likely completed the first wave (orange) of a five-wave upward pulse that has been forming since September 21st.

The number of sub-waves will be displayed in black, indicating that BTC may have completed the fifth sub-wave.

The high was brought very close to the $ 70,500 target, which was determined using the Fib outer retracement level (black) and the Fib projection (white).

If so, BTC could decline towards the support levels described above to complete the second wave.

BTC / USDT 6-hour chart | Source: TradingView

The number of alternate waves shows that BTC has been in the second wave since October 19th. However, this suggests that this correction will decrease towards at least $ 61,000.

This move will bring the price to the support line of the parallel channel. Additionally, an extension of sub-wave c (black) will bring the price to $ 54,300, which coincides with the long-term support area.

BTC / USDT 6-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.

SN_Nour

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