The price of Bitcoin has been impulsively decreasing in the last 24 hours which indicates that sell-off has started.
If we have seen the completion of the bullish upswing last Thursday we are now seeing the higher degree downtrend starting which is set to bring the price of Bitcoin to some of the significant resistance levels, broken on the way up, out of which the most significant one would be at around $6250 and the next one at around $4300.
- The price has broken three significant support levels with the price action showing impulsiveness.
- As the three-wave structure developed we are now likely to see a minor recovery to some of the broken levels.
- If we are seeing a downtrend starting with the first five-wave impulse developing, the price cannot go above $8130 on the expected recovery.
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Bitcoin Analysis BTC/USD
From yesterday’s open at $8462, the price of Bitcoin has decreased by 11.19% as it came down to $7514 at its lowest point today. Since today’s low, the price has started recovering and reached $7930 but is currently being traded around $7876.
On the hourly chart, we can see that yesterday’s open was on the ascending support level from the channel in which it was since the 11th of May. The price fell below it moving further down below the second horizontal level (purple interrupted line) which was the minor resistance point on the way up and later served as support on the first downfall from last Thursday.
The sellers have managed to push the price inside the lower range in an impulsive five-wave manner which indicates that the downtrend has started.
Now that the three waves have developed to the downside from last Thursday we are likely to see an upward correction developing.
If we are seeing the development of the first five-wave move to the downside from the staring downtrend, the expected move to the upside would be its 4th wave and in that case cannot go above the interrupted purple line at around $8130 after which the 5th wave to the downside should develop.
If we are seeing some complex correction developing the three-wave move from last Thursday could be the first structure with the expected upside move being it’s second in which case the increase could continue to $8500 level which is the next significant resistance point.
I was expecting an interaction with the 0.382 Fibonacci level before the completion of the bullish upswing but it hasn’t occurred so another possibility could be that we even see a corrective upside move to it but I don’t believe that’s likely.