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Bitcoin (BTC) made a bearish breakout from the short-term structure, but rebounded from the Fibonacci support level. The direction of the trend remains unclear.
Bitcoin declined significantly on May 18, forming a candle of bearish takeover. As a result, BTC closed day trading at $28,715, which was the lowest intraday closing price since December 2020.
Below current levels, there is no horizontal support, only weak support for wicks to the $27,000 area, formed by the long lower wicks of May 11 and 12.
Short-term bearish breakthrough BTC
On the 2-hour chart, bitcoin has been trading inside an ascending parallel channel since May 13. On May 18, the price finally made a bearish breakthrough from it.
This breakthrough was preceded by a bearish breakout on the RSI (green line) and a decrease in the index under the 50 mark (red icon). As a rule, such dynamics of the RSI is a harbinger of a similar price reduction, which enhances the significance of such a move.
BTC rebounded from the Fibo level of 0.5 retracement by $28,500. The next nearest support is in the area of $27,700.
Despite this bearish breakout, a closer look reveals that the price is likely trading inside a “downward wedge” pattern that is traditionally considered bullish.
However, the way to the north of the bulls is blocked by the former support, which has now become resistance, in the region of $ 29,300. Only taking this barrier will allow them to start growing.
Outcomes wave analysis suggest that if BTC is trading inside the “descending wedge” pattern, then the price may be in the process of completing the formation of the “ending diagonal” pattern within the C wave (white).
In this case, we can expect a bullish breakout and potential growth to a maximum of $ 32,900 (black color), after which bitcoin will launch a new phase of decline.
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