After being rejected on June 26, Bitcoin (BTC) is now making another attempt to break the USD 40,550 resistance area.

Despite signs of short-term weakness, BTC is expected to eventually break out.

BTC is trying to break out

BTC has been up since July 20th. On July 26, it hit the resistance area of ​​$ 40,500 and fell, leaving a long wick above it.

However, the price resumed its bullish move on July 27th and is now making another attempt to break above the $ 40,500 area. In addition to the horizontal resistance that has existed since May 19th, it is also the 0.382 Fibonacci retracement resistance area.

In the event of a breakout, the next resistance is at $ 47,771. This is the 0.618 fib retracement resistance.

The technical indicators in the daily timeframe are rising and supporting a breakout. The RSI has passed the 70s and the stochastic oscillator has created a bullish cross. The MACD line is rising and its histogram is generating higher momentum bars.

BTC / USDT daily chart | Source: TradingView

Short term movement

The 2 hour chart is not as bullish as the daily chart. In addition to the potential double top, there has been a significant downward divergence in both the RSI and the MACD.

Additionally, BTC is trading with strong resistance and created a long top wick in response to this zone on July 27th.

If rejected, the next supports are found at $ 36,200 and $ 33,550. These are the support levels for the fib retracement at 0.382 and 0.618.

BTC / USDT 2-hour chart | Source: TradingView

Count waves

The most likely wavenumber indicates that BTC is in wave C (orange) of an ABC correction. The number of sub-waves is shown in red, which shows that BTC is in a sub-wave five after completing a pullback that did not wave four.

The $ 42.181 high would give wave A: C a 1: 1.61 ratio, making it the most likely target.

BTC / USDT 2-hour chart | Source: TradingView

Although wave C may extend 2.61 times the length of A to hit $ 50,218, the most likely high remains the $ 42,181 level.

After reaching the summit, another drop is expected.

BTC / USDT daily chart | Source: TradingView

You can see the BTC price here.

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.

SN_Nour

According to Beincrypto

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