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Bitcoin (BTC) is still trading at the bottom of the corrective pattern, which has been present on the chart since June 18. The direction of the trend remains unclear.
SINCE June 18 (the moment of the formation of the minimum), BTC has been trading inside the ascending parallel channel. Such channels are usually associated with corrective patterns. This means that in the end, the most likely scenario may be a bearish breakthrough from it.
In addition, bitcoin is now at the bottom of this channel. This reinforces the likelihood that the current move is a correction.
However, the channel’s support line remains intact and seems to have initiated a price rebound. In addition, the 6-hour RSI index came out of the oversold zone after a recent drawdown.
When this was observed the previous time (green icon), BTC launched a phase of significant growth.
Thus, the further direction of the trend will largely depend on whether bitcoin will be able to move above the median line of the channel or make a bearish breakout of the support line.
On the 2-hour chart, you can see that bitcoin has been moving along the downward resistance line since August 15 (the moment of the formation of the local maximum). The price has already bounced off it four times (red badges).
The 2-hour RSI is rising (green line) but still remains below the 50 barrier. Thus, both the price and the RSI are now facing their own resistance line.
A bullish BTC breakout from this channel could target the market at $22,500 (Fibo level 0.382 retracement).
Meanwhile, the inability to make such a breakthrough and the subsequent drawdown of the price below $ 20,800 may lead to a breakdown of the lower boundary of the previously allocated channel.
BTC Wave Analysis
The most likely long-term scenario wave analysis suggests that Bitcoin has already completed the formation of the base. However, a shorter-term analysis involves two options.
According to the bullish forecast, BTC has completed the formation of the “ending diagonal triangle” pattern and is now in the first part of the A-B-C corrective structure.
In this case, the market will find support over $ 20,000 and resume growth.
The second scenario points to a complex correctional structure (black color) and assumes that now bitcoin has launched a bearish impulse (yellow color). This is linked to the presence on the chart of the channel.
The choice between bullish and bearish scenarios will depend on whether BTC makes a bearish breakthrough from the channel or recovers above its midline.
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