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Bitcoin (BTC) is trading within a short-term corrective pattern and may make a bearish breakout.
Bitcoin hit a local low of $ 42,000 on December 4 and has been trying to rally ever since. As a result, the BTC rate reached a maximum of $ 51,936 on December 7.
However, in the process of forming this high, BTC turned the former upward support line (red icon) into resistance. Since then, the price has come down. This line also coincides with the resistance area of $ 52,400 (Fibo level of 0.382 retracement), which increases the significance of this area as a resistance. Hence, new price bounces are likely.
Technical indicators are still giving bearish signals too.
Thus, MACD is in the red zone and declines, showing that the short-term MA is slowing down relative to the long-term MA. Yesterday, the indicator finally formed a rising momentum bar (green icon). This is an indication that MA is starting to gain momentum. However, you need to make sure that this is not a false signal (green circle) like the one that took place between November 29 – December 2.
The RSI, which is a momentum indicator, has dipped below 50 and is declining, which is also a sign of a bearish trend.
A source: TradingView
Short-term channel BTC
On the 6-hour chart, Bitcoin has been trading within a descending parallel channel since November 10, when the market reached its all-time high around $ 69,000.
These types of channels are usually associated with corrective patterns, which means that BTC could take a bullish break out of it.
However, the market is still trading directly around the median line of this channel (green circle). Price needs to recover above this line for a bullish breakout potential to be highlighted.
Unlike the daily timeframe, here both the MACD and RSI are growing on this timeframe, although the first indicator has not yet entered the green zone, and the second is below the 50 mark.
Source: TradingView
Bitcoin rebound
Finally, on the hourly chart, BTC is showing readiness for a short-term bearish breakout.
The price is trading in the lower part of the upward parallel channel, while it has already touched the channel support line three times.
In case of a breakout, bitcoin will meet key support in the region of $ 46,950 (Fibo level of 0.5 retracement). This is a good area for a rising low to form.
Source: TradingView
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