Bitcoin Bullish Wicks On Daily Candles Show Buying Pressure

Bitcoin (BTC/USD) is showing strong buying pressure… But price action has been unable to break sustainably above the previous top. 

Can the bulls keep control or is a deeper retracement around the corner?

Price Charts and Technical Analysis

(Click on image to enlarge)

The BTC/USD daily chart is moving sideways. But buyers are stepping in as soon as price enters the $54-56,000 support zone (blue box). 

If we also consider a) uptrend and b) the bullish impulse before (blue arrows), then the bulls still remain firmly in control. Let’s review:

  • Price action needs to break above the previous top and resistance (red box) to confirm an immediate breakout and uptrend continuation (green arrows).
  • An uptrend could confirm a wave 5 (orange) pattern.
  • The larger wave patterns indicate potentially more upside as the wave 5 (orange) completes a wave 3 (grey) of wave 5 (pink) of waves 3 (purple, red, black).
  • A break below the support, however, indicates a deeper retracement (dotted orange arrow). In that case, price action could test the previous wave 4 (orange) bottom (green box). A bullish bounce is expected there (dotted green arrows).

On the 4 hour chart, BTC/USD is either building a new uptrend or a larger correction might take place. Let’s review when we expect one of these two patterns to be confirmed:

  • A bullish breakout (green arrows) above the resistance (orange box) confirms that a wave 4 (light blue) is completed and that price action is moving up for a wave 5. The current chart pattern looks like a bullish ascending wedge pattern.
  • A light pullback (orange arrow) could indicate a larger ABC (green) correction in wave 4 (light blue).
  • A deeper retracement (red arrows) could indicate a change of the wave outlook. The 123 (light blue) pattern is invalid and a larger wave 4’ (orange) is taking place. 
  • The bulls remain in control as long as price action remains above the support zone (21 EMAs and support trend line (green).
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Disclaimer: The opinions in this article are for informational and educational purposes only and should not be construed as a recommendation to buy or sell the stocks mentioned or to solicit ...

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