Bitcoin Breaks Above 21 EMA Resistance In 5 Waves

Bitcoin (BTC/USD) made a bullish bounce at the 78.6% Fibonacci retracement level. It was followed by a bullish breakout above the 21 ema resistance zone as expected in our analysis.

This article analyses the expected Elliott Wave and Fibonacci patterns on the Bitcoin 4 hour and 1 hour charts.

Price Charts and Technical Analysis

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The BTC/USD made a strong bullish reversal after testing the previous bottom and Fibonacci retracement levels:

  • The bullish reversal is probably part of a ABC (green) wave or even a potential 123.
  • Price action managed to break above the resistance trend line (dotted orange) during the weekend.
  • But price action still faces hefty resistance (red box) from the previous top and long-term moving averages.
  • A bearish bounce (orange arrows) could retest the support again where a bullish bounce is expected (green arrows).
  • A bullish breakout (blue arrow) could indicate an immediate push up. A bull flag pattern (grey arrows) could indicate even more upside (purple arrow).
  • A break below the support line (green) places it on hold (orange circle) and a break below the bottom invalidates it (red circle).

On the 1 hour chart, price action is showing strong bullish momentum:

  • A 5 wave pattern (black 1-5) seems to be visible.
  • The bullish 5 waves could complete a wave 1 (blue).
  • A bearish ABC (black) could indicate a wave 2 (blue).
  • The Fibonacci retracement levels of wave 2 could act as support (blue arrows).
  • Especially the support zone (green box) could indicate a bounce due to the inverted head and shoulders pattern.
  • All Fibonacci levels are potentially support levels.
  • A break below the 88.6% Fib makes it less likely (orange circle) whereas a break below the bottom invalidates it (red circle).

(Click on image to enlarge)


Disclaimer: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. On average around 80% of retail investor accounts loose money when trading with high ...

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