The bitcoin (BTC) price has been decreasing over the past two days, breaking down from a short-term ascending support line.
Despite the decrease, BTC has found support at the 0.5 Fib retracement support level at $53,000 and began the ongoing bounce.
Bitcoin decreased considerably yesterday, creating a bearish engulfing candlestick. It fell from a high of $57,200 to a low of $53,046, amounting to a total decrease of 7%.
It’s possible that the drop occurred in order to validate the descending resistance line from which BTC broke out prior.
BTC bounces at support
The short-term chart shows that the price has been moving downwards over the past two days. This led to a breakdown from an ascending support line, which had previously been in place since the April 26 low.
The decrease is still ongoing and has taken BTC to the $53,000 support area. This is the 0.5 Fib retracement level of the entire upward move and a horizontal support area. Once it got there, the price began moving upwards
In addition, technical indicators are turning bullish. The RSI has generated a bullish divergence and the MACD has given a bullish reversal signal. Therefore, it’s likely that the price continues to increase in the short term.
If it does, the main resistance area is found between $56,000-$56,700. This target range is the respective 0.5-0.618 Fib retracement levels of the downward movement.
A breakout and retest of this level would confirm that the short-term trend is bullish.
The wave count suggests that BTC is in wave five (white) of a long-term bullish impulse.
The two most likely targets for the top of this upward move are located at $81,300 and $102,300. These targets are found by using a Fib projection on waves 1-3.
The sub-wave count is shown in orange. It suggests that the price has completed sub-waves one and two.
A decrease below the sub-wave one low of $47,004 would invalidate this particular wave count.
Bitcoin has likely found support at $53,000 and is expected to resume its trajectory to the range highs.