Bitcoin (BTC) pushed back from May 25 support and avoided a bearish breakout. Now the price is trying to make a bullish breakout of the corrective pattern
Despite the bullish breakout attempt, it is more likely that BTC will decline again to complete the correction and only then continue the uptrend.
Bitcoin bailed out with a bounce
As shown by technical analysis of the daily chart, the BTC exchange rate has been trading inside a downward parallel channel since April 14.
The BTC price attempted a bearish break of the $26,800 support area and the midline of the channel on May 12 and May 25. However, both times it bounced back (green icons).
Then bitcoin decisively reclaimed the area. Currently, the price of BTC is trying to make a bullish breakout of the channel resistance line.
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The Relative Strength Index (RSI) is giving mixed signals as it is now holding above the 50 mark, but previously it was below it.
It is a momentum indicator which shows if the market is overbought/oversold and bullish/bearish, depending on whether it is above or below 50.
However, the bullish reversal has yet to be confirmed.
When BTC stops falling
In the meantime, wave analysis suggests that price will eventually break out of the channel in an upward direction. However, there could be one more drop before a final bullish breakout.
The main scenario assumes that the price completed a five-wave upward structure which began in November 2022 (white).
The main scenario assumes that the price has completed the five-wave ascending structure which began to form in November 2022 (white).
In this case, the decline from April 16, 2023 is part of a W-X-Y corrective structure.
If this analysis is correct, the price will soon complete wave X. Then it will start the final decline to complete the Y wave.
It will then start the final decline to complete the Y wave.
The most likely bridgehead for completing the correction could be between the Fibo retracement levels of 0.382-0.5 (white), passing at $23,300-$35 100.
The Fibonacci retracement levels are traditionally considered the most probable levels for stopping and reversing prices after a major advance in any one direction.
As expected, at these levels, the market can win back some of the distance traveled and only then resume the movement in the original direction.
In addition, they can determine the limits of the price move. In spite of this bearish short-term forecast for the price of BTC.
Despite this bearish short-term outlook for the BTC price, a close above $29,000 would signal the end of a short-term correction. In that case, the price could rise to $35 000.