The price of Bitcoin broke the significant resistance area around $6250-6500 and made substantial gains over the weekend. This breakout is highly significant as it could indicate the end of the bear market but the price now needs to hold above it before for a proper confirmation.
- The price increase is the ending wave of the Minute impulse but the further increase could be seen if the Minuette impulse hasn’t ended.
- A sharp decline occurred on Sunday which could be an early indication of the starting downtrend as the price reached its top according to an alternative count
- Today’s increase would in either way be the ending upside movement before a higher degree downtrend.
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Bitcoin Analysis BTC/USD
From Friday, when the price of Bitcoin was $6220 at it’s lowest point we have seen an increase of 19.31% measured to yesterday’s high at $7421.6. but immediately made a corrective decline to $6870. Since yesterday the price has started increasing again as it came up to $7341.4 at its highest point today.
Looking at the 5-min chart, we can see that the price broke out from the significant resistance encountered at around $6250-6500 with strong momentum.
This breakout hasn’t been my primary expectation as I thought that we are seeing the 5th wave as an ending diagonal but the ascending structure proved to be the 4th wave correction after all which is why the 5th wave developed further beyond its resistance level.
The price action created an ascending channel that led the price above the significant horizontal resistance level and the ascending resistance after which a minor pullback to retest the mentioned levels for support was made.
This could have been the first two waves out of the five-wave move to the upside if we follow the channeling principle. The formation of another ascending channel followed but this time a steeper one as the breakout momentum increased.
Today’s increase would according to this count be the 5th wave which is set to surpass the Sunday’s high which is why further upside could be expected potentially to $7723 level before we see the expected downturn as the higher degree impulse wave would end.
Another possibility would be that the five-wave increase ended on Sunday as the first ascending channel consisted of the first three waves, in which case the breakout upswing was the 5th.
If this is true then we are seeing the beginning of the higher degree decrease that is set to push the price back to the broken horizontal resistance levels at around $6250.
This level is highly significant and its breakage is now signaling the potential confirmation of the end of the bear market as it was a significant invalidation point from my projected scenario in which the upside movement seen from 15th of December is correctional.
Even though the price came above the level and my count got invalidated I wouldn’t change my overall bearish outlook until we see the price holding above it.