On April 18, Bitcoin (BTC) fell below $40,000 for the first time this month. Short-term indicators are showing extremely oversold levels, suggesting a significant recovery is imminent.
This effectively wiped out any surges that Bitcoin experienced during the week of March 21-28 (green icon). Furthermore, it caused a crucial close below $43,600, a level that was expected to serve as support. Now it will probably resist again.
The next closest support on the weekly timeframe comes near the January wick lows at $35,700.
Mixed readings
Technical indicators on the weekly time frame are mixed.
The MACD and RSI are both falling and their bearish trendlines (black lines) are still intact. On the other hand, there are hidden bullish divergences (green lines) that have been developing in both indicators.
Although the price action appears bearish, BTC is currently still trading above the 0.5 Fib retracement support level at $36,100.
The outlook on the daily time frame is decidedly more bearish. The RSI broke from an ascending support line and is now below 50. The MACD is also declining and is in negative territory.
Additionally, BTC has fallen below an ascending support line that has been in effect since Jan. 14, but it has yet to make a daily close below that line.
Future BTC movement
Despite the downward movement on the weekly and daily time frames, short-term signals suggest that a bottom is relatively close.
This is due to the bullish divergence on the oversold 6-hour RSI. In the two previous cases (green lines), significant upward price movements followed.
The wave count suggests that BTC is completing an ABC corrective structure (red) that could lead to a low of $37,000. This would give waves A and C a 1:1 ratio. This would also allow BTC to retest the support line of a major ascending parallel channel.
The short-term wave count suggests BTC is in the fifth and final wave and suggests a primary target of $38,200 to bottom. This is determined using the 1.61 external Fib retracement of wave four (black) and the length of wave one (yellow).
The long-term wave count suggests that an eventual move above $50,000 would likely follow.
for BeInCrypto’s previous Bitcoin (BTC) analysis, click here
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