Bitcoin (BTC) created a bullish candle on Feb. 23 and is currently approaching near-term resistance.
BTC bounced sharply on Feb. 22 after bouncing off the $36,600 horizontal support area (green icon). This zone has acted as support since the uptrend began on Jan. 24th.
However, the price is barely able to form a bullish engulfing candle as there are long wicks on either side.
The next macro resistance can be found at $44,200.
BTC/USDT daily chart | Source: TradingView
The 6-hour chart shows the key resistance area at $40,050 created by the 0.382 Fib retracement resistance.
Moreover, the resistance also coincides with the midline of the descending parallel channel that BTC broke on Feb. 15.
BTC/USDT 6 hour chart | Source: TradingView
This possibility is further supported by the two-hour chart, which shows BTC breaking the descending resistance line after creating significant bullish divergence.
As a result, a move higher to $40,050 seems the most likely scenario.
BTC/USDT 2 hour chart | Source: TradingView
There are two possible possibilities for Bitcoin’s long-term wave count.
Similarly, there are two main possibilities for short-wave counts. Any volatility is likely to determine the long-term trend.
The first scenario shows that BTC has completed the ABC correction structure.
Therefore, an uptrend towards $49,350 is expected. This target is found by projecting the height of the previous rally to yesterday’s low.
BTC/USDT 4 hour chart | Source: TradingView
The second scenario suggests that the ongoing decline is bearish momentum. In this case, the price corrects within the fourth wave before another decline.
Whether BTC breaks the February 14 low at $41,575 (red line) will be crucial to determine which wave count is correct.
BTC/USDT 4 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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