18 May 2022 07:58, UTC
Reading time: ~2 m
Over the past five days, bitcoin has consolidated directly under $30,500, and short-term indicators do not promise BTC success in breaking through this area. Rather, we will see a decline, and only then a new attempt at growth.
On May 5, bitcoin made a bearish break from a long-term ascending parallel channel (red icon) and has been declining ever since. As a result, on May 12, the BTC rate reached a minimum of $ 26,700.
After that, the price rebounded and tried to start growth. However, it does not manage to recover over the important horizontal area of $ 30,500. Previously, since June 2021, this area has played a support role.
Thus, the further direction of the trend will largely depend on whether the BTC rate will be able to recover above this level, confirming that the trend for the coin is still bullish.
The dynamics of the daily RSI also highlights the importance of the $30,500 area as the index moves along a line of downward resistance that coincides with this level.
Short-term dynamics of BTC
On the 6-hour timeframe, bitcoin broke through the downward resistance line that had been present on the chart since May 5, when the market made the aforementioned bearish breakout.
The bullish breakout of this resistance line was accompanied by a bullish divergence along the RSI (green line), and the trend line of the indicator remains unbroken.
However, the 2-hour chart still warns of the likelihood of a bearish breakout. Two arguments speak in favor of this scenario.
First, here the trend line of bullish divergence has been broken. The REBOUND OF THE RSI coincided with the rebound of BTC from the midline of the channel.
Secondly, bitcoin has been trading inside an ascending parallel channel since May 13. Such channels are usually associated with corrective movements, and this means that the most likely outcome may be a bearish breakthrough.
In this case, the nearest support area will be located between $ 27,700 and $ 28,500. These are Fibo levels of 0.618 and 0.786 retracement.
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