Bitcoin (BTC) created a bullish candlestick during the week of July 4-11 but failed to engulf the preceding weekly bearish candlestick and created a long upper wick.
Bitcoin has been falling since reaching an all-time high price of $69,000 in November 2021. So far, the downward movement has led to a one-and-a-half-year low of $17,622 on June 17, 2022.
The rebound that followed served to validate the $19,200 horizontal area as support. This area previously acted as the all-time high resistance from December 2017 until the price finally broke out in January 2021. Now, it’s possible that the area has turned to support.
The weekly RSI is at a new all-time low inside the oversold region. However, it has not generated any sort of bullish divergence yet.
BTC/USDT Chart By TradingView
BTC moving under a long-term resistance line
The daily chart provides some conflicting signs. The price has been moving beneath a descending resistance line since the end of March. On July 8, BTC failed to reach this resistance line and was rejected by the $21,700 horizontal resistance area instead. The horizontal line now coincides with this descending resistance area.
While the RSI has broken out from a descending resistance line, something that is normally considered bullish, it has yet to move above 50. As a result, daily chart readings are leaning bearish.
BTC/USDT Chart By TradingView
Future movement
The six-hour chart paints a mostly bearish outlook. The reason for this is that the price has been increasing inside an ascending parallel channel since June 18. Such channels usually contain corrective movements, meaning that a breakdown from it would be expected.
Currently, the price is trading in the lower portion of the channel, giving even more credence to this possibility.
BTC/USDT Chart By TradingView
Additionally, the wave count shows that another downward movement is likely. It suggests that the price is in the final wave of a five-wave downward movement. Using the length of waves 1-3 (yellow), the 0.382 Fib would lead to a low of $16,620 while the 0.618 Fib level could lead to a long-term low of $13,100.
BTC/USDT Chart By TradingView
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