Bitcoin Prepares For New Bullish Breakout After Completing ABC

Bitcoin (BTC/USD) has made a bearish retracement to the 144 ema close. The strong bullish bounce indicates that the uptrend is probably far from over.

Let’s analyse the wave and chart patterns to understand the next potential price swings.

Price Charts and Technical Analysis

(Click on image to enlarge)

The BTC/USD finally made a pullback after a strong surge up. The previous bounce at the 144 ema was when price broke above the $40k level and retraced back around $29k.

  • Now price action also completed an ABC pattern (blue) as part of a wave 4 correction (orange). 
  • The buyers were able to find support at the 144 ema and 38.2-50% Fib zone (blue box).
  • Price action is now testing a key resistance level (orange). A bullish breakout could confirm the restart of the uptrend.
  • The first main target is the previous high around $57k. 
  • If price action breaks the top, then $65-75k are on the horizon.

Considering the bullish momentum and trend, this swing up could be just a first step of multiple waves 3.

On the 1 hour chart, price action completed a bearish ABC (blue) in wave 4 (orange). Now price action is an uptrend channel.

  • A bullish break is first aiming at the resistance levels (orange boxes).
  • Bull flag patterns (green/grey arrows) indicate an uptrend (green arrow).
  • If price action bounces heavily at the previous high (red arrows), then a retest of the previous bottom is likely. This could create a larger ABC (black) in wave 4 (orange).
  • Only a sudden decline would indicate a deeper correction first. But for the moment, a bullish breakout is likely. 
  • The main question is how price action will respond to the previous top? Will it break and continue or will the wave 4 expand?

(Click on image to enlarge)

 

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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