Bitcoin (BTC) likely completed a corrective structure following the November 19th rally. It is imperative that the USD 56,500 support area hold.

BTC fell significantly for the week of November 15-21, creating a bearish engulfing candle. This is a bearish candlestick pattern where all of the previous week’s profit is covered by the next decline.

Despite the ongoing uptrend, BTC is still trading just below the long-term support area of ​​$ 59,000 and is currently trading at $ 57,500. The same area previously acted as resistance at the February-April all-time high and is now expected to act as support.

BTC / USDT weekly chart | Source: TradingView

Short term movement

The daily chart shows BTC trading above the horizontal support at $ 56,500. This is the 0.382 fib retracement support (in white) when measuring the most recent part of the upside move.

On November 19th, BTC bounced off this support area (green icon) and is currently retesting it.

Despite the near-term recovery, the technical indicators are still bearish as both the MACD and RSI are falling.

The decline is particularly related to the RSI, which has fallen below 50 (red circle). The RSI is a momentum indicator and the 50 line is often viewed as a benchmark for determining whether the trend is bullish or bearish. The RSI previously rose above 50 on September 29th (green circle) in the initial phase of the rally. In order to continue the uptrend, it is necessary to recapture the 50 line.

If there is a breakdown, the next support is found at $ 53,250. This is the 0.5 fib retracement support.

BTC / USDT daily chart | Source: TradingView

The six-hour chart shows that BTC is moving below a descending resistance line.

BTC / USDT 6-hour chart | Source: TradingView

Count waves

The wave count shows that the entire move since October 20th has been part of an ABC correction structure. Wave C has a usual ratio of 1: 1.61 to wave A for such structures.

As a result, BTC may have bottomed out locally and the correction is complete.

The long-term wave count shows that BTC is in a large 1-2 / 1-2 wave formation.

BTC / USDT 4-hour chart | Source: TradingView

The number of alternate waves is a bit more bearish as the November decline is wave A of the ABC structure.

However, this means that an upward move towards the $ 62,400-64,000 zone is yet to come before another decline occurs. The number of partial waves is displayed in red.

Hourly BTC / USDT Chart | Source: TradingView

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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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