Bitcoin (BTC) on a roller coaster. Will the $25,000 mark stand?
Date: 2023-09-01 Author: Karina Ziganova Categories: BLOCKCHAIN
The price of Bitcoin (BTC) is declining after hitting an annual high in July. It recently made a bearish breakout of a long-term rising support line.
Weekly timeframe signals and price action are decidedly bearish, confirming the possibility of a further decline in Bitcoin (BTC).
Bitcoin declines after bouncing off long-term resistance
As the results of the technical analysis of the weekly chart show, the picture for bitcoin is frankly bearish. This is due to price rejection above the $30,000 resistance area and its subsequent decline below this area (red icon). This led to the formation of a long upper wick, which is a sign of bearish pressure.
After the pullback, BTC made a bearish breakout of the ascending support line. Its break was regarded as a significant bearish event, since this line has been present on the chart since the beginning of the year. BTC is currently trading just 6% above the $24,500 horizontal support area.
Meanwhile, the news background for the world's main cryptocurrency is mixed. Although the US Securities and Exchange Commission (SEC) has delayed its decision on applications for a spot bitcoin ETF, analysts are still hopeful that this will happen as early as 2023.
The weekly RSI is giving strong bearish signals. This momentum indicator has just moved below 50 (red circle) for the first time since the start of the year (green circle) when it formed an upward support line. This bearish sign further reinforces the bearish breakout and suggests further declines in BTC are expected.
BTC Forecast: Will Bearish Breakout Lead to Further Declines
Just like the weekly chart, the daily time frame promises further weakening for Bitcoin.
After reaching a yearly high, the price declined along a descending resistance line. The inability of the price to break this line is considered bearish, which may lead to further decline.
Secondly, the daily RSI has formed a bearish divergence (green line). The divergence trend line remains intact and coincides with the price rebound from the resistance line.
And finally, the wave analysis suggests that the price is in the fifth and final wave of the bearish structure. If this is true, then the price will complete the fifth wave near the 0.5 Fibonacci level at $23,600.
Despite the bearish outlook for BTC, a bullish breakout of the descending resistance line would mean that the correction is over and the trend remains bullish. In this case, the price may head towards the annual high of $31,800.
