Bitcoin (BTC) is balancing above $30,000. Will it fail or not
Date: 2023-07-11 Author: Karina Ziganova Categories: BLOCKCHAIN, CRYPTO PAYMENTS
Since June 23, the price of bitcoin (BTC) has been trading as part of a corrective pattern, which may be a price reaction to the previous upward movement.
Although the BTC price updated this year's high on July 5, the subsequent price movement indicates the possibility of further decline. This scenario is confirmed by wave analysis and the RSI indicator.
BTC formed a bearish candle and fell
As the results of the technical analysis of the daily chart show, the price of BTC fell immediately after it updated its annual high around $31,500 on July 6. On the same day, it formed a "shooting star" candle. This is a type of bearish candlesticks that occur on local tops. It is characterized by a long upper wick and a bearish closing. This means that, despite the growth, sellers prevailed and pushed the price well below the high and opening price.
Moreover, this candle caused bitcoin to close below the horizontal resistance area of $31,500. This is another bearish signal, reinforcing the significance of the "shooting star".
However, the daily RSI gives mixed signals. Recall that if the values of this momentum indicator exceed 50 and the trend is upward, buyers retain the advantage, and vice versa. In this case, although the RSI is declining, it is still above 50. Thus, the picture seems contradictory.
Wave analysis promises bitcoin a decline, and then an increase
Meanwhile, the wave analysis of the shorter 6-hour chart suggests that the long-term outlook is bullish, but a fall should be expected in the short term.
According to the wave chart, BTC has completed the formation of a five-wave bullish structure originating from the levels of June 15. If this is true, then the price movement since reaching the high on June 13 has been corrective (highlighted on the chart). The fact that the coin moves inside a parallel channel confirms this probability.
Thus, under this scenario, BTC may make a bearish breakout from the channel and fall to the Fibonacci level of 0.382 at $28,900 or even to the Fibonacci level of 0.5 at $28,150.
After that, the previous long-term upward price movement may continue.
The six-hour RSI also supports the possibility of a bearish breakout. The indicator is declining and is below the level of 50. Both of these signals are signs of a bearish trend.
Despite such a bearish short-term forecast, the price going beyond the high of the fifth wave at $31,500 will mean that the correction is complete and the trend is bullish. In this case, BTC is likely to make a bullish break out of the channel and reach the next resistance at $36,000.
