Disclaimer: Cryptocurrency trading carries a high degree of risk and may not be acceptable for all investors. The opinions expressed in this article do not reflect those of KogoCrypto.
Despite the lack of a bullish structure, Bitcoin has continued to hang on to far higher support.
Bitcoin Weakness Could Lead to Drop
BTC accompanied a shooting star candlestick from Dec. 27, making a tiny bullish candlestick the next day. However, this move did not come close to the highs of the previous day.
The daily RSI has also begun to show weakness in the form of the bay’s divergence. However, neither the MACD nor the Stochastic oscillator produced any kind of bearish signal.
The six-hour map reveals a more pronounced bay divergence, noticeable in both the RSI and the MACD. In addition, we can see that BTC has been pursuing an upward line of support, currently just over $25,000.
The weakness noticeable in both the regular and the six-hour charts indicates that BTC could drop and validate this line before moving higher.
Lower timeframes show that BTC is trading at $26,250 above a low level of support (0.382 Fib retracement level). Up to this point, BTC has produced a few long lower wicks that have also touched the 0.5 Fib retracement level at $25,550.
There are no bullish reversal signs in the two-hour timeframe so far. A collapse below these levels of support could lead to a dramatic drop to $24,000.
However, as illustrated in the previous section, BTC trade is just above the critical level of support. This has produced two long lower wicks, making BTC more likely to bounce off the current price range.
BTC Wave Count
In yesterday’s wave count review, BeInCrypto reported that BTC is likely to be in the final (black) wave 5 (orange) sub-wave, which is expected to close to $29,800.
Despite yesterday’s fall, the count is still the same.
A closer look shows that it is likely that BTC has just completed sub-wave 4—or will do so after a slightly lower low.
However, the degree of invalidation of this count just above sub-wave 1 at $24,661 remains the same.
Bitcoin is expected to quickly reverse its trend and make another attempt to create a new all-time high price. A drop of less than $24,661 will invalidate this particular scenario.
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