Bitcoin Makes Another Failed Attempt at Breaking out Above $31,500

Bitcoin (BTC) failed to break out from a confluence of resistance levels and created a bearish candlestick that took it to $30,000.

BTC has been falling below a descending resistance line since April 5. The most recent rejection occurred on May 5, leading to the $26,700 low on May 12. 

The price has been moving upwards since, but has failed to create a bullish structure. Instead, it has been trading inside an ascending parallel channel, which usually contains corrective structures. 

Yesterday BTC was rejected (red icon) by the middle of the channel, the $31,500 resistance area and the aforementioned descending resistance line. In turn, this created a bearish candlestick. 

The price is now trading at the support line of the channel once more.

Current movement

The daily RSI readings provide a mixed outlook. 

On one hand, the RSI has generated bullish divergence (green line). On the other, the RSI has been rejected twice (red icons) by the 50 line and has generated some hidden bearish divergence.

If the bullish divergence trendline gets broken, this would most likely lead to lower prices.

The two-hour chart shows that the price is decreasing inside a descending parallel channel. Currently, it is attempting to stay above the middle of this channel (red icon). 

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A breakdown below it would confirm the daily time frame readings and indicate that lower prices are in store.

BTC wave count analysis

There are two likely wave counts that could occur. 

The first is bearish, and suggests that the price is in wave four of a five-wave downward movement (white). 

If correct, it means that the price will soon drop below $25,000 in order to complete wave five.

The second is more bullish, since it indicates that wave five completed by truncation.

In this possibility, the price has reached a low and will soon increase towards $35,000. 

Whether another breakout or rejection from $31,500 occurs will likely determine which count will transpire. 

For Be[in]Crypto’s previous bitcoin (BTC) analysisclick here


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