Bitcoin (BTC) Creates Weekly Bearish Engulfing Candlestick After Retesting $25,000
Bitcoin (BTC) has made a bearish weekly candlestick and is showing more bearish signals in the daily time frame.
Bitcoin has been falling since reaching an all-time high of $69,000 in November 2021. The decline has so far led to a local low of $17,622 made in June 2022.
The price retraced after (green icon), validating the horizontal area of $19,300 as support and has since increased.
While this upward movement led to a local high of $25,211 on August 15, Bitcoin created a bearish engulfing candlestick in the week of 15-22. August. In turn, this nullified a large part of the gains since the June bottom.
Additionally, the weekly RSI is still following a descending resistance line and has yet to move above 50. So the weekly trend is still considered bearish.
Current BTC Pattern
The daily chart offers a mostly bearish outlook. The main reason for this is that the daily RSI has broken down from its rising support line and also dropped below 50. Such movements usually precede price declines. Also, the RSI decline below 50 is considered a sign of a bearish trend.
Furthermore, the price has fallen below the $22,000 area after apparently breaking out above it. The area is now expected to provide resistance.
The six-hour chart shows that BTC has been trading in an ascending parallel channel since the June 18 bottom. Such channels usually contain corrective structures, which means that a possible breakdown from it will be the most likely scenario.
Also, Bitcoin is currently in the lower part of the channel, lending legitimacy to the possibility that the price will break down from the channel.
If this happens, BTC is likely to fall towards new lows.
Wavenumber analysis
The most likely long-term wave figure suggests that Bitcoin has completed an ABC corrective structure (red) measured from the all-time high. In it, waves A and C had a ratio of 1:1.61, which is the most common in such structures.
The possibility that a bottom has been reached fits with various chain indicators.
Due to the presence of the channel, the alternative count would indicate that Bitcoin has just completed wave four and another final decline will follow before the bottom.
Until Bitcoin breaks down from the channel, this option remains.
For Be[in]Crypto’s previous Bitcoin (BTC) analysis, click here
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