BTC broke out from the ascending support line that had been in place since July 12th, suggesting a move to the downside. The breakout of the rising wedge indicates that the drop is part of wave A of a corrective A-B-C structure.
The price of the pioneering cryptocurrency has recently dropped, indicating that its bullish trend has ended.
Over the last month, Bitcoin has moved primarily to the upside after breaking above a descending resistance line in place since late March.
However, it did not maintain its upward trend and could only hit a local high of USD 25,211. That level was considerably below the 0.382 Fibonacci retracement resistance at USD 29.370.
After that, Bitcoin dropped and created a long top wick until hitting a low of USD 23,180.
The daily Relative Strength Index (RSI) broke out from the ascending support line that had been in place since the bullish move began. Those drops are often a sign that the previous upward trend has ended.
The nearest support area might be around USD 21,550 if the downward trend remains.
The Short-Term Analysis of the Bitcoin Price
The six-hour chart shows BTC has traded within an ascending parallel channel following its low in June. Those ranges often contain corrective patterns, implying that a breakout might occur.
Bitcoin has also generated a bearish divergence at the resistance line of that channel. Then it broke out from the ascending support line that had been in place since July 12th.
The six-hour chart aligns with the daily time frame, suggesting a move to the downside.
The Analysis of the BTC Wave Count
The primary wave count suggests that Bitcoin has completed wave five of a main diagonal due to the ongoing decline, shaping the rising wedge. The breakout suggests this belongs to wave A of a corrective A-B-C structure.
A drop toward the 0.5-0.618 Fibonacci retracement support between USD 20,500 and USD 21,400 might occur before resuming the upward move.
According to the most likely long-term wave count, the price has already reached the bottom.
Bitcoin is trading at around USD 23,483 and has accumulated a 0.3% gain over the last 24 hours. While its daily trading volume is above USD 22.18 billion, its market capitalization is about USD 449.09 billion, according to CoinGecko.
Meanwhile, Ether Is among the Best-Performing Cryptocurrencies
The expectations for what may happen on Ethereum due to the Merge will lead many to acquire ETH. That may lead the native cryptocurrency of the network to appreciate significantly in the short term.
Technical analysis shows that the next resistance would be in the USD 2,200 area. If the price broke through that barrier and continued to rise, it would find resistance between USD 2,500 and USD 2,700.
If Ether exceeded those resistances, it should face the USD 3,000 psychological barrier. When that happened in October 2021, it moved steadily toward the all-time high, close to USD 4,900.
By Alexander Salazar
