The price of Bitcoin (BTC) rose significantly over the weekend, preventing a possible glitch in the process. However, the direction of the future trend is yet to be determined.
Last week, Bitcoin price created a huge, long, lower wick (green icon). Even though the close is somewhat bearish, the move can be considered bullish due to the length of the wick.
In addition, the wick affected two other bullish structures.
First, it saved a potential horizontal area breakdown of $21,000. Now the area is expected to provide support again. Second, it kept the RSI above 50. This is considered a sign of a bullish trend.
Therefore, while the trend is still neutral due to range, several bullish signals make a breakout more likely.
A breakout from the top of the range could lead to an increase to $28,000. On the other hand, a breakdown could lead to a drop towards $17,000.
Bitcoin (BTC) price shows mixed signs
Similar to the weekly chart, the daily offers some mixed signs. BTC price bounced on March 10, validating the previous channel as support. It created a huge bullish candlestick on March 12.
However, the daily RSI has yet to break out of its bearish divergence trendline (green line). Plus, it’s still under 50.
Therefore, the trend cannot be considered bullish yet.
Next, the short-term six-hour chart shows that Bitcoin price has broken out of a descending resistance line. This followed an RSI breakout and move above 50.
Now BTC price is trading at the 0.5 Fib retracement resistance level at USD 22,400. Whether it breaks out or is rejected can determine the future trend.
Wave Count Analysis: Relief Rally or Bullish Reversal?
There are two potential counts in play. The bullish suggests that BTC has just completed a fourth wave pullback. If so, it has started the fifth and final wave of an upward move that will take it to $28,000.
The count would be invalidated by falling below the wave one high (red line) at $18,387.
The bearish count suggests that BTC is in a corrective wave two and will fall again. However, the number of subwaves (red) in wave one is extremely unusual. This makes the first count more likely. The bearish count would be invalidated by a rise above the previous highs of $25,250.
Finally, the future BTC trend is still undetermined. Whether the price falls below $18,387 or rises above $25,250 will help determine its future movement. The former would lead to lows below $15,000, while the latter could lead to a rise to $28,000.
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