Bitcoin’s price broke through a long-term descending resistance line as well as a short-term ascending parallel channel. It might have started a bullish reversal.
Bitcoin has been trading below a descending resistance line since April 5. Until then, the decline move took to a long-term low of $17,622 on June 18th.
The price of BTC has since accumulated and broke above its resistance line on July 18. A break above such a long-term resistance line often leads to considerable upside movement. In this case, the resistance of the 0.382 Fibonacci retracement measured from the entire height of the resistance line is found at $29,400.
The price crossing above this line coincides with a rise in the RSI above 50, which is also considered a sign of an uptrend. As long as the RSI support line (in green) remains in place, the bullish structure is considered intact.
The short-term breakthrough of BTC
The six-hour chart agrees with the data readings for the day. It shows that BTC broke above an ascending parallel channel and then validated it as support (green arrow). During this advance, BTC also broke above the $22,800 horizontal resistance zone.
Due to the intensity of the drop that took place between June 7th and June 14th, there is hardly any horizontal resistance up to $32,000 except for a minor area at $28,000 . It is therefore possible that the price movement will accelerate soon.
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Wave count analysis
The most plausible wave count suggests that Bitcoin has completed a five-wave decline pattern (in yellow) started in April. In this case, wave five will be truncated and failed to cross below the wave three floor.
As for the longer-term wave count, it looks like Bitcoin has completed a corrective pattern in ABC since the decline from its all-time high. It is therefore possible that a considerable upward movement will ensue.
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