Bitcoin recovers after collapse under support

CONTENT

  • BTC formed a long wick Doji candle last week.

  • The daily chart gives mixed signals.

  • BTC has probably completed the formation of a bearish wave structure and is now making an A-B-C correction.

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By the beginning of the new week, Bitcoin has noticeably recovered after a drawdown on November 26. However, the current growth may be just a correction, and not the beginning of a new up-trend.

Doji candle speaks of indecision

At the end of the week on November 23-30, the bitcoin rate (BTC) formed a Doji candlestick with long wicks and a bearish close.

Typically, a Doji candlestick is considered a sign of market indecision, however, if it appears after an uptrend phase, it can also serve as an indication of a weakening trend..

The high of the week almost equals the all-time high of $ 19,645, forming a “double top” pattern.

However, the indicators on the weekly chart are not showing signs of weakness so far, despite the strong overbought RSI..

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MTC schedule. Source: TradingView

Drawdown or continuation?

The daily chart is giving conflicting signals.

After falling on November 26, Bitcoin has pulled back noticeably, but has not yet absorbed previous highs. If the price declines from current levels, it will form the first declining high since the price rally started in September.

The MACD indicator and Stochastic Oscillator are declining, with the latter forming a bearish crossover. However, the RSI is holding above 50 and has given strong hidden bullish divergence signals prior to the current rally..

If the RSI bounces off 70 and declines, it will confirm a bearish trend.

Schedule MTC. Source: TradingView

On the 6-hour chart, the price is now trading between two important Fibo levels of 0.618 and 0.786 retracements, creating a range of $ 18,250- $ 18,790.

A bullish breakout of the $ 18,790 level and turning it into support would mean that BTC is likely heading to new highs. However, the loss of the $ 18,250 area would mean that the entire rise in price was a correction and the market will now head south. In this case, the nearest support area will be $ 17,250.

Technical indicators remain bullish and show no signs of weakness yet.

Schedule MTC. Source: TradingView

The 1-hour chart shows the first clear signs of weakening. MACD and RSI are declining after they have given bearish divergence signals earlier. In addition, the price is in the process of a bearish breakout of the parabolic upward support line, which has been on the chart since the formation of the lows on November 26.

Its breakdown will be confirmed in case of decline below $ 18,250.

Schedule MTC. Source: TradingView

Wave analysis

Bitcoin recovers after collapse under support

According to the most likely scenario in the framework of wave analysis, the BTC rate has already completed the formation of a bearish impulse structure, and is now making an A-B-C correction (both patterns are shown in the chart in red).

If the results of our analysis are correct, then Bitcoin has already reached or will reach the top in the very near future, after which it will begin to decline towards the support area of ​​$ 17,200.

Continued growth will cause a very unusual ratio of waves A and C to appear on the chart, which will cancel this analysis.

Schedule MTC. Source: TradingView

An alternative bullish scenario assumes that the market is at the beginning of a new growth phase and that the price is now trading within wave 3 (black).

However, we still expect a correction and absorption of the wave 1 high at $ 17,406 will neutralize this scenario..

In general, at the time of writing the forecast, a bearish scenario seems more realistic.

MTC schedule. Source: TradingView

Conclusion

Thus, the further fate of the BTC rate will largely be determined by a bullish breakout above $ 18,790 or bearish – below $ 18,250.

You can read the previous Bitcoin forecast here.

Disclaimer: Trading cryptocurrencies carries a high level of risk and is not suitable for all investors. The opinion expressed in this forecast does not reflect the opinion of the editorial staff of BeInCrypto.

Disclaimer

All information contained on our website is published in good faith and objectivity, and for informational purposes only. The reader is solely responsible for any actions he takes based on the information received on our website..

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Bitcoin recovers after collapse under support
Bitcoin recovers after collapse under support
Bitcoin recovers after collapse under support

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Bitcoin recovers after collapse under support

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