Bitcoin (BTC) Hits Second Highest Daily Close in 2022
After breaking above the short-term descending resistance line, Bitcoin (BTC) is attempting to move above the $44,100 horizontal resistance area.
Bitcoin has been rising above the ascending support line since January 24 and has created two long lower wicks after recovering from this line.
On February 28, BTC created a large bullish bar and followed it with a smaller bullish bar the next day.
Currently, it is trading below the $44,400 resistance area. If it tries to break out, the next nearest resistance will be found near $51,100.
The technical indicators show a bullish picture, as both the RSI and the MACD are bullish and the previous line is above 50.
However, the MACD must also cross into the positive zone to confirm the uptrend reversal.
The six-hour chart shows that BTC has broken out of the descending resistance line. This is a strong sign that the short-term correction is over.
Additionally, BTC has regained the 0.786 Fib retracement resistance. This is the last important Fib level before making a full retracement.
While there is no obvious short-term pattern, it is possible that BTC has been trading inside a symmetrical triangle since March 1. This triangle is generally considered a neutral pattern, giving find that both breakouts and breakouts are equally likely.
BTC wave count analysis
Short-term numbers show BTC is in wave four out of five up.
The main reason for this is the fact that the price is holding above the previous resistance line of the channel and is likely to confirm it as support.
If BTC creates a symmetrical triangle, it would take a long way to suggest that this is the correct amount.
Alternatively, BTC could drop towards the midline of the channel at $43,000 and remain within a valid fourth wave formation. This will create a fourth wave of pullbacks.
However, a drop below the high of wave one (red line) at $40,330 will invalidate this particular wave count.
As for the long-term wave count, if the rally is confirmed as a five-wave pattern, the count will more likely indicate that the correction ended on Feb. 24, with a truncated five-year sub-wave (green icon).
This indicates that the entire structure is a running planar correction, contained within an ascending parallel channel. If true, that would mean BTC could steadily rise in the direction of a new all-time high price and the February 24 low would not be broken.
For previous BeInCrypto Bitcoin (BTC) analysis, click here
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