The price broke out of the USD 22,700 resistance area, but a drop caused it to suffer another pullback. The most likely wave count indicates that BTC has completed the five-wave descending pattern beginning in April.
The pioneering cryptocurrency is recovering its 200-week moving average (MA) after leaving a long-term descending resistance line.
Throughout the history of Bitcoin (BTC), the 200-week MA has acted as a price floor many times. Besides, the value of the cryptocurrency had not reached a close below that level for a sustained period.
The price of BTC has reached five weekly closes below that moving average to date. That is the period that it has remained under the 200-week MA the longest.
The current moving average is nearly USD 22,700, which Bitcoin is trying to recover. Its first attempt is underway, but the price might drop even further if it fails.
The Price of Bitcoin Is Breaking a Descending Resistance Line
The daily chart shows that the price of Bitcoin might move above that moving average.
Bitcoin has broken a descending resistance line in place since early April.
The Daily Relative Strength (RSI) index has moved above 50 and follows an ascending support line.
If the upward move continues, Bitcoin might reach the 0.382 Fibonacci retracement resistance level close to USD 29,400.
The price recently left a short-term ascending parallel channel and the USD 22,700 resistance area. However, a drop caused it to fall back into that area again.
Bitcoin must quickly move above the channel boundaries if the upward move continues.
The Analysis of the BTC Wave Count Analysis
According to the most likely wave count, BTC has completed the five-wave descending pattern beginning in April. In that case, wave five has a truncation, as it did not move below the bottom of wave three.
That wave count could mean that Bitcoin has started a new upward move. It would take it toward the USD 29,500 resistance area and even higher.
The Price Cycles in the Market of Bitcoin
The bearish trend began on June 13th, when the realized price of BTC dropped below its market price. According to Grayscale, the Bitcoin rally reached its all-time high, with last year being the longest since 2020.
There were 391 days in the 2012 cycle where the realized price was below the market price of Bitcoin. There were also 364 days in the zone during the 2016 cycle.
In 2012, the market peaked at 603 days while the time increased by around 180 days for each subsequent cycle. It took 786 days in 2016 and 952 days in 2020 to reach its maximum point. Likewise, the 2012 and 2016 cycles, lasting 1,290 and 1,257 days, decreased by 73% and 84%, respectively.
In July 2022, the market has completed 1,198 days of the current 2020 cycle. That might indicate that almost four months must pass before the realized price crosses the value in the market again.
Bitcoin is trading at around USD 22,942 billion and has accumulated a 3.9% loss over the last 24 hours. Its daily trading volume is above USD 48.80 billion, while its market capitalization is about USD 438.18 billion, according to CoinGecko.
By Alexander Salazar
