Bitcoin (BTC) produced a bearish engulfing candle on July 5th, but didn’t go back any further the next day.

It trades within a short-term symmetrical triangle and a longer-term range.

BTC trading range

BTC generated a bearish engulfing candle on July 5th. The next day it tried to move upwards but left only a long upper wick (red symbol).

However, the MACD did not signal a bearish reversal but instead created a higher momentum bar. In addition, the stochastic oscillator created a bullish cross.

The next levels of support and resistance are at $ 32,000 and $ 40,550, respectively.

BTC / USDT daily chart | Source: TradingView

Short term consolidation

The six-hour chart doesn’t give the same crucial signals.

It is possible that BTC is trading within a symmetrical triangle, although the triangle’s resistance line has not been validated enough times.

The symmetrical triangle is often viewed as a neutral pattern.

Technical indicators are also undecided. The MACD is at the zero line while the RSI is floating freely above and below 50, a common sign of an undefined trend.

BTC / USDT 6-hour chart | Source: TradingView

Count waves

The number of waves is currently unclear. Because of the triangle, this means that the movement is part of the X-wave of a complex correction structure.

BTC / USDT 6-hour chart | Source: TradingView

The number of bearish waves was presented in yesterday’s analysis where the current movement of a 1-2 / 1-2 wave structure becomes less likely. This is because once the price breaks the channel, it cannot initiate a sharp downward move.

On the contrary, BTC is in the process of regaining the channel’s support line.

While still technically possible, it is confirmed by a breakout above the descending resistance line connecting the tops of Wave 2 (black) and Subwave (red) 2.

Hourly BTC / USDT 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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