Bitcoins are seen in this illustration picture taken September 27, 2017. REUTERS/Dado Ruvic/Illustration - RC19EC5CA1C0
Bitcoin (BTC) is currently trading within a short-term correction pattern and is likely to fall below it.
BTC appears to have been higher since its rebound on December 4th, shortly after the price hit a local low of $ 42,000. The upward move led to a high of $ 51,936 on December 7th.
However, the rally was used to confirm the previous rising support line as resistance (red symbol). Since then, BTC has fallen. The rejection also coincides with the $ 52,400 resistance area, which corresponds to the 0.382 fib retracement resistance. Hence, this is a major resistance area that could keep the price down.
In addition, the technical indicators continue to decline.
The MACD, formed by the short and long-term moving averages (MAs), is in negative territory and is decreasing. This means that the short-term MA is falling faster than the long-term MA. However, the histogram has produced a higher momentum bar (green icon), which is a sign that the downward momentum has slowed.
Even so, it remains to be seen whether this is a wrong signal (green circle), similar to what happened from November 29th to December 2nd.
The RSI, a momentum indicator, is bearish and is below the 50 mark. This is seen as a sign of a downtrend.
BTC / USDT daily chart | Source: TradingView
The six-hour chart shows BTC trading in a descending parallel channel since its all-time high on November 10th.
Such channels are often viewed as corrective patterns, which means there will be an outbreak over them.
However, BTC is still trading just below the center line of the channel (green circle). In order for an outbreak to occur, this line must be retraced.
Unlike the daily time frame, both the MACD and RSI are bullish. However, the former is still in negative territory and the latter is below 50.
BTC / USDT 6-hour chart | Source: TradingView
Finally, the hourly chart shows that BTC is breaking in the short term.
The main reason for this is that he is trading in the lower part of the ascending parallel channel. Additionally, it touched the support line for the third time.
If there is a breakdown, the key area of support is at $ 46,950. This is the 0.5 fib retracement support and is the appropriate area for a higher low.
BTC / USDT daily chart | Source: TradingView
You can see the BTC 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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