From a long-term ascending parallel channel, Bitcoin has broken down. BTC is trading above the $27,800 Fib support level. RSI on a daily basis is bullish. The daily and weekly time frames of Bitcoin's (BTC) RSI have shifted from bearish to bullish, but the price movement has not yet caught up with this trend reversal.
The week of May 23–30 saw the creation of another minor bearish candlestick for Bitcoin. This was the ninth straight weekly candlestick that was bearish since the week of March 28–April 5. Another breakdown from a long-term rising parallel channel resulted from this.
Despite this, the price has failed to go below the $26,700 low it reached on May 12. The price is currently hovering just over the 0.618 Fib retracement support level, which is $28,700. BTC has plummeted beneath the horizontal support of $30,000 despite this being a significant Fib support level. As a result, until prices fall below $20,000, there is no longer any horizontal support.
Overall, the weekly chart seems to be inconsistent. The price is trading above Fib support, and the RSI has risen to levels typically linked with bottoms, which is positive.
On the negative side, the price has descended from a horizontal support zone and rising parallel channel.
Bullish RSI and bearish price action
The weekly overview's judgment that the price has descended from a horizontal support level is supported by the daily chart. The horizontal level that has now become resistance in this time frame is located at $30,500.
In spite of this development, the daily RSI is unambiguously optimistic.
First off, it has produced a sizable bullish divergence (green line), a phenomenon that frequently occurs before bullish trend reversals. The indicator has also emerged from a declining trendline (dashed, black).
The next closest area of resistance, if this event sparks an upward surge in BTC, would be between $37,500 and $40,000. The resistance zone around the 0.5-0.618 Fib retracement is the target range.
Consequently, the daily chart is a little bit more optimistic than the weekly one. The RSI is clearly bullish even though the price is trading below horizontal barrier.
Analysis of BTC wave counts
The weekly RSI readings that indicate that BTC is approaching or has already reached a bottom are supported by the long-term count. It shows that wave four of a five-wave long-term rising advance that started in December 2018 has been completed by the price.
BTC may have just completed the C wave of an A-B-C corrective structure, according to the forecast from the daily chart (red). It has the typical 1:0.618 ratio found in such formations between waves A and C.
The next ratio, if a bottom is not reached at the current level, would be 1:1 at $12,100. If the price is compared to the current pricing, this represents a decrease of more than 60%. Therefore, a clear fall below the present level would probably indicate that BTC is in a protracted bear market, just as the weekly time frame count predicts.
