Bitcoin (BTC) recovers its support level after bearish daily candle
Bitcoin (BTC) declined significantly on July 5, creating a engulfing bearish candlestick.
This caused a break in a short term support line. However, BTC has since recovered the line.
Bearish engulfing candle
After BTC created a bearish engulfing candlestick on July 5, it hit a low of $ 33,125 before rebounding.
Technical indicators are bearish. The MACD Histogram has created a lower momentum bar (red icon) which could give a bearish reversal signal if there is another negative daily close.
While the Stochastic Oscillator has made a bullish cross (green circle), the RSI is still below 50.
The closest resistance zone is at $ 40,550 while the closest support level is at $ 31,400.
Short-term BTC breakdown
The two-hour chart offers a mixed outlook. The bearish engulfing candlestick described earlier has broken a short-term ascending support line.
However, BTC has since recovered the support line.
Additionally, technical indicators provide mixed readings. This is particularly noticeable in the RSI, which is moving freely above and below 50. It is a sign of an undetermined trend.
However, a closer look aligns with the bearish outlook.
First, the previous death appears impulsive (highlighted in red).
Second, BTC was rejected at the 0.618 Fib retracement level at $ 34,885. Therefore, a return below this level would be the most likely scenario.
For the full wave count, click here.
For BeInCrypto’s previous bitcoin (BTC) analysis, click here.