The price action has formed a cluster from yesterday’s open which appears to be an ascending triangle. This indicates that the buyers are trying to start a recovery which sellers are holding their positions at the minor horizontal resistance level.
- A breakout to the upside is expected from the current cluster.
- First significant resistance is at $8140 and next is at $8500.
- After the interaction with the mentioned resistance points, more downside would be expected.
Bitcoin Analysis BTC/USD
From yesterday’s open at $7508 the price of Bitcoin has recovered slightly but hasn’t come up above $7865 where it found minor resistance. The price is currently being traded at around those levels as another attempt is being made for the price to exceed those levels.
On the hourly chart, you can see that the price action of Bitcoin formed an ascending triangle from yesterday’s open as higher highs have been made but the resistance remained at the same horizontal point as the sellers are putting pressure there.
Prior to the formation of the current cluster, we have seen a decrease of 14.52% in a five-wave manner which is the third wave to the downside from last Thursday.
This indicates that now we are likely to see a recovery as the 4th wave would be the one to the upside and the previous five-wave one has ended.
This is why I would be expecting a breakout to the upside from the currently seen cluster. If the price goes to the purple interrupted level at $8140 and gets rejected there it would mean that the small recovery was the 4th wave out of the higher degree five-wave move which started last Thursday when the first significant downfall of over 9% has been made and would be a stronger indication of the starting downtrend with the price forming another lower low.
If the increase continues past the mentioned level it would mean that the decrease seen from last Thursday ended as a three wave move in which case the decrease was seen could still be the part of the 4th wave of the Minute count with another higher high ahead and potentially an interaction with the 0.382 Fibonacci level.
But if the price gets rejected at around $8500 it could mean that a more complex correction has started to form.
In either way, the price of Bitcoin is expected to go significantly lower after some recovery has been made as the 5th wave of the Minor count has been completed or is near completion.
The most significant support zone with whom the interaction would be awaited would be at around $6250 which was a major resistance point on the way up and highly significant horizontal area.
If the price breaks the level and continues moving to the downside the next significant support area would be at $4300-4100 but we are yet to see if the seller’s momentum would be strong enough to push the price that low.