Bitcoin (BTC) is still in the process of completing a correction phase. Whether price bounces off or breaks below the support line of the current pattern is likely to determine the direction of the trend in the short term.

Ascending parallel channel

BTC has been trading on an ascending parallel channel since hitting a local low on December 4th. Movement within the channel hit a high of $ 52,088 on December 27th.

However, it couldn’t move any further and has been falling ever since. The high serves to confirm both the $ 51,600 resistance area and the channel’s midline as resistance.

Currently, BTC is trading at the support line of the channel and is likely to rebound.

BTC / USDT 6-hour chart | Source: TradingView

Short term support

The hourly chart shows that BTC has fallen below the USD 48,050 support area. This is both the 0.618 fib retracement support and the horizontal zone. It could have confirmed this area as resistance today (red icon).

Despite the decline, there is still strong support at $ 46,950. It is created by the 0.786 Fib retracement support plane and a horizontal support area.

If the upward trend is to continue, BTC has to hit a higher low here.

Hourly BTC / USDT Chart | Source: TradingView

Count waves

There are currently two possible wave counts. While both claim that BTC will eventually hit the $ 55,000 to $ 58,000 region, their short-term moves are different.

The first wave count indicates that BTC will hit the low on December 4th, completing wave X of the WXY corrective structure. It can then rebound to the $ 55,500 to $ 58,700 zone, the Fib resistance area of ​​0.5 to 0.618.

BTC / USDT 6-hour chart | Source: TradingView

The number of second waves shows that the decline is complete and from here the price should move into the resistance area.

BTC / USDT 6-hour chart | Source: TradingView

Whether BTC breaks below the channel’s support line or jumps up will determine which wavenumber is correct.

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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