Bitcoin is trading inside of a descending wedge. After breaking down from a head-and-shoulders pattern, it has decreased all the way to the support line of the wedge. It seems to be in the process of finishing the fifth and final wave of the correction.
- The Bitcoin price is trading inside a descending wedge.
- The 50- and 200-day moving averages have almost made a bearish cross.
- There is support at $7000-$7400.
- There is a bullish divergence in both the RSI and the MACD.
Looking at the daily chart we can see that BTC is trading inside a descending wedge.
Yesterday’s decrease took us all the way to the support line. The line coincides with the $7000-$7400 support area, which is the last significant support area before around $5500 — excluding the minor support area at $6000.
We almost have a death cross, since the 50- and 200-day MAs are very close to making a bearish cross.
Furthermore, we have had a bullish divergence in development in both the RSI and the MACD since the Bitcoin price began consolidating on September 24.
However, the trendline of the divergence in the RSI broke during yesterday’s decrease. While the divergence is still present, we cannot link two lows with a straight line.
We would expect a clearer divergence once the price sets on making a new swing low.
It is possible that we bleed out towards $7000 while trading close to the support line of the wedge.
As per yesterday’s wave count, this should be the final wave of the correction.
For a long-term buy and hold strategy, one might consider buy orders inside this support area near the low $7000s.
Good luck and happy trading! For yesterday’s analysis click here.
Disclaimer: This article is not trading advice and should not be construed as such. Always consult a trained financial professional before investing in cryptocurrencies, as the market is particularly volatile.
Images courtesy of Twitter, TradingView.
Did you know you can trade sign-up to trade Bitcoin and many leading altcoins with a multiplier of up to 100x on a safe and secure exchange with the lowest fees — with only an email address? Well, now you do! Click here to get started on StormGain!