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After a bearish breakout on May 10, bitcoin (BTC) tries to recover above the $30,500 horizontal area and turn it into support again.
On May 5, bitcoin made a bearish breakout from a long-term rising parallel channel (red icon), and since then the pace of BTC’s decline has accelerated. As a result, on May 12, the coin hit a low of $26,700.
The price then rebounded and is now trying to recover above the $30,500 horizontal area (red circle). Previously, since May 2021, this area played the role of support.
The further direction of the trend may largely depend on whether the BTC rate manages to recover above this level, confirming that its recent breakout was just a price deviation, or whether the coin will bounce from here and decline again.
Source: TradingView
What the indicators tell us
The dynamics of the daily RSI also underscores the importance of the $30,500 area. It coincides with the RSI support, which has become resistance.
The RSI index has been consolidating above 35 (green icon) since April 11, clearly using this area as support. A bearish price breakout out of the channel occurred at the same time as a bearish breakout of this level. The 35 area is now resistance for the RSI (green icon).
Thus, if BTC is able to recover above $30,500, and this is also confirmed by the RSI rising above the 35 mark, it would be an indication of the current bullish trend.
This scenario is also supported by long-term wave analysis, which suggests that the price has probably fumbled for a bottom.
Source: TradingView
Short-term dynamics BTC
On the 2-hour chart, you can see that bitcoin made a bullish breakout from the short-term descending parallel channel and formed the first rising low.
On this timeframe, strong resistance is located at $31,800. It is formed by the Fibo level of 0.382 retracement and is also in relative proximity to the $30,500 resistance area mentioned above.
If BTC can break above it, the growth rate of the kinoin could accelerate.
Source: TradingView
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