Bitcoin (BTC) appears to have reversed trend after bouncing off the midline of the previous trading pattern. It is possible that the short-term correction is complete.
Bitcoin (BTC) has been falling since Feb. 10 after hitting a local high of $44,821, creating a shooting star candle (red icon). The rejection occurred at the 0.618 Fib resistance at $44,890 and led to a low of $41,550 on Feb 14th.
The price has since recovered and is currently trading at $43,781. Bitcoin is currently approaching the $44,890 resistance area again.
BTC/USDT daily chart | Source: TradingView
The six-hour chart shows Bitcoin bouncing off the center line of an ascending parallel channel that has been in place since Jan. 24.
After breaking out on Feb. 6, Bitcoin returned to the channel’s midline and confirmed it as support. This surge also coincides with the 0.382 Fib retracement support at $41,950.
BTC/USDT 6 hour chart | Source: TradingView
A closer look at the 2-hour time frame shows that the ongoing uptrend in both the RSI and MACD is preceded by significant bullish divergence. Such divergences often precede a trend reversal.
Therefore, the current pattern supports a bullish continuation.
BTC/USDT 2 hour chart | Source: TradingView
The wave count shows that BTC has completed the fourth wave of an upside impulse and has just started the fifth and final wave of this rally.
The most likely target for the top of the move is between $47,625 and $47,912. This target area is the length of wave one (red) and the outer 1.61 Fib retracement level of wave four (black).
BTC/USDT 2 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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