Bitcoin (BTC) has experienced a strong correction on February 22nd, testing the low of $ 45,000. At the time of writing, the first cryptocurrency is trading in the region of $ 48,300
Despite the significant drop, the correction is likely to be short-term and we will soon see bitcoin at new highs.
Bitcoin tries to find support
Bitcoin entered a correction and tested the minimum of $ 45,000 on February 2 trading. However, buyers appeared in this area and helped the price recover.
Technical indicators point to some weakening. In particular, the MACD and RSI crossed the 70 mark. However, these signals are not always enough to confirm a bearish reversal. Depending on the daily close, it is likely that the RSI will generate a hidden bullish divergence – a trend continuation signal.
The six-hour chart shows that BTC tested the 0.382 Fibonacci retracement level at $ 48,422, followed by $ 45,355 (0.5 Fibonacci retracement).
The RSI held above the 50 mark for 25 days and finally moved lower. This could be a sign of a trend reversal similar to that of January 10, 2021.
The 2-hour chart shows some signs of a bullish reversal in the form of a bullish divergence on the RSI and a very long bullish hammer (green arrow).
Until BTC manages to break through the short-term downside resistance line, we cannot consider the correction complete.
BTC Wave Analysis
The most probable wave count suggests that BTC is in the fourth wave of bullish impulse (shown in orange), which started from the Jan 28 lows at $ 29,000. When the wave is finished, Bitcoin will rush to the $ 60,000 area.
The most likely wave count suggests that BTC has completed or is nearing the completion of sub-wave A. We come to this conclusion because prices have already tested the 0.382 Fibonacci support.
Most likely, BTC can test Fibonacci 0.5 again, but, most likely, it will first correct and complete sub-wave B.
In a more optimistic scenario, this will develop into a fourth wave triangle. In this case, the current low will actually be the lowest price reached.
However, it is currently difficult to predict the further nature of the correction.
Despite the ongoing decline, Bitcoin is looking for support between the 0.382 and 0.5 Fibonacci retracement support levels. Then recovery will begin.
It is likely that BTC has yet to rise to a local high.
Here you can read the previous technical analysis for Bitcoin (BTC).
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