Bitcoin (BTC) collapsed on July 19, falling below the $ 31,300 horizontal support area that has existed since May.
The next support is at $ 28.805 where a potential double bottom is emerging.
BTC has been trading in a range of $ 30,300 to $ 40,550 since May 19. Although the price fell below the support area a few times, BTC did not close below that for the day.
On July 19, BTC fell below the support again, closing at $ 30,839, its lowest level since January.
Despite many unconfirmed bullish divergences, the technical indicators are still bearish. RSI and MACD are falling and the stochastic oscillator has created a bearish cross and is also turning down.
However, the trading volume of the breakout candle is small.
BTC / USDT daily chart | Source: TradingView
Looking at the weekly timeframe, the key area of support is at $ 27.050. This is the 0.618 Fib retracement support that measures all of the upward move since March 2020.
Weekly BTC / USDT Chart | Source: TradingView
BTC has been falling along with a descending parallel channel since June 29th.
Yesterday’s decline caused a break below the channel. Additionally, the price was unable to recover from the 0.854 fib retracement support at $ 29.925. The next potential support would be the $ 28.784 level where a double bottom could be hit.
The two-hour RSI is currently deep in the oversold area at 23. This is the lowest since June 8th, when it rose more than 30%.
BTC / USDT 2-hour chart | Source: TradingView
The number of waves indicates that BTC is in a flat correction structure. The downward move since June 28th has been sluggish and gradual, making it unlikely to be a bearish impulse.
Shallow corrections often completely compensate for losses, so a potential raised floor is likely.
For a more detailed look at the long-term wavenumbers, click here.
BTC / USDT 6-hour 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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