Bitcoin: Elliott pattern inside a rising wedge
Bitcoin is trading within a five-wave Elliott pattern located within a rising wedge pattern.
Support is located at $ 6700 and $ 5800.
The price formed a triple top on the short-term chart, supported by bearish divergence signals.
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On April 2, Bitcoin broke through an important resistance area around $ 6800. After that, the currency turned this area into support and went north of it..
In the process of growth, the BTC rate effortlessly broke through the resistance level of $ 7000 and reached a maximum at $ 7452, from where it then corrected to $ 7300.
Bitcoin (BTC) has appreciated significantly since hitting a low on March 13. The price growth took place within the “rising wedge” pattern, which is considered a bearish reversal pattern.
The pair may continue to trade within this wedge until it reaches the next resistance level at $ 7750. At the same time, a five-wave Elliott pattern seems to be forming on the chart, which should bring the price to this resistance.
If we really observe the implementation of this scenario, then now the price is directly at the top of the third wave, and now we can expect a decline in the direction of the support line. After that, the pair will have to start the final phase of growth and then make a bearish break.
This version is also supported by small bearish divergence signals provided by the RSI. They are more visible on short-term time frames..
In the event of a bearish breakout, the nearest support areas are at $ 6700 and $ 5800.
On the short-term chart, bitcoin has been moving along the upward support line since March 30, having tested it for strength three times during this time.
The price has formed a triple top pattern, which is combined with strong bearish divergence signals on the RSI. This promises the pair to decline, at least to the upward support line. This will complete the formation of the fourth wave of the Elliott pattern, which we wrote about above..
A bearish breakout of this line could lead to a bearish breakout of the longer-term rising wedge pattern. However, at the moment we cannot predict with certainty that this will happen..
Thus, the BTC rate is trading within the rising wedge pattern and is now close to the resistance line of this pattern. The price is likely to make another upside attempt, after which it may turn south and decline to the above support areas.
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