Bitcoin (BTC) has failed to initiate any kind of upward movement after breaking out of a short-term descending wedge.
Bitcoin has rallied above a rising support line since June 18. The line has been validated several times, most recently on 26 July. This led to a local peak of $24,668 on July 30. Throughout this period, the daily RSI, which is still above 50, has also followed a rising support line (green).
During the upward move, Bitcoin managed to break out of the horizontal resistance area of $21,750 and a descending resistance line that had previously been in place since the end of March. However, it has yet to initiate a significant increase. Rather, it has regressed after the outbreak.
There is a strong support level near $21,750, created by the rising support line and a horizontal support area.
The six-hour chart gives no clues as to the direction of the trend.
First, it is possible that BTC is trading in an ascending parallel channel, which is often considered a bearish pattern. As a result, an eventual breakout from the pattern would be the most likely scenario. This possibility is supported by the divergence (red circle) and subsequent decline below the $23,750 horizontal area.
However, the price is still trading above the midline of the channel and has apparently validated it as support. The possibility of a bullish breakout remains as long as Bitcoin trades above this level.
Finally, the RSI moves freely above and below 50, in what is considered a sign of a neutral trend.
So, the six-hour chart provides a neutral view and does not help determine the direction of the next move.
Short term BTC breakout
The two-hour chart shows that BTC broke out of a descending wedge on August 3rd. The breakout occurred after the price rebounded from the 0.5 Fib retracement support level.
However, Bitcoin failed to initiate any major upward moves and is trading back near the 0.5 Fib retracement support level. This is a crucial level because the 0.618 Fib retracement support level at $22,225 could cause a bounce, but there is no horizontal support below it until $20,700.
For Be[in]Crypto’s previous Bitcoin (BTC) analysis, click here
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