After being rejected on June 26, Bitcoin (BTC) is now making another attempt to break the USD 40,550 resistance area.
Despite signs of short-term weakness, BTC is expected to eventually break out.
BTC has been up since July 20th. On July 26, it hit the resistance area of $ 40,500 and fell, leaving a long wick above it.
However, the price resumed its bullish move on July 27th and is now making another attempt to break above the $ 40,500 area. In addition to the horizontal resistance that has existed since May 19th, it is also the 0.382 Fibonacci retracement resistance area.
In the event of a breakout, the next resistance is at $ 47,771. This is the 0.618 fib retracement resistance.
The technical indicators in the daily timeframe are rising and supporting a breakout. The RSI has passed the 70s and the stochastic oscillator has created a bullish cross. The MACD line is rising and its histogram is generating higher momentum bars.
BTC / USDT daily chart | Source: TradingView
The 2 hour chart is not as bullish as the daily chart. In addition to the potential double top, there has been a significant downward divergence in both the RSI and the MACD.
Additionally, BTC is trading with strong resistance and created a long top wick in response to this zone on July 27th.
If rejected, the next supports are found at $ 36,200 and $ 33,550. These are the support levels for the fib retracement at 0.382 and 0.618.
BTC / USDT 2-hour chart | Source: TradingView
The most likely wavenumber indicates that BTC is in wave C (orange) of an ABC correction. The number of sub-waves is shown in red, which shows that BTC is in a sub-wave five after completing a pullback that did not wave four.
The $ 42.181 high would give wave A: C a 1: 1.61 ratio, making it the most likely target.
BTC / USDT 2-hour chart | Source: TradingView
Although wave C may extend 2.61 times the length of A to hit $ 50,218, the most likely high remains the $ 42,181 level.
After reaching the summit, another drop is expected.
BTC / USDT daily chart | Source: TradingView
You can see the BTC price here.
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
According to Beincrypto
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