Bitcoin (BTC) Fails to Sustain Upward Movement and Drops Below $30,000

Bitcoin (BTC) reached a high of $32,399 on May 31 but fell the next day and has dropped below $30,000 once more.

BTC has been moving upwards since reaching a low of $26,700 on May 12. So far, the increase has led to a high of $32,399 on May 31.

The upward movement was preceded by bullish divergence in the RSI generated bullish divergence (green line) and also broke out from a bearish trendline (dashed). The trendline of the divergence is still intact, indicating that the upward movement could still continue.

As for the price action, a battle between the bulls and bears is currently transpiring in regards to the $30,500 horizontal area. The area had previously acted as support since May 2021. As it stands, it is not yet certain whether BTC has broken down or deviated below this area. Whether it manages to validate it as support will likely have a decisive say in determining the direction of the future trend.

Short-term movement

The daily chart shows that bitcoin has been following a descending resistance line since March. The line is currently at $32,500. 

On June 1, the price fell sharply prior to reaching this resistance line. The drop served to validate the $31,400 horizontal area as resistance. 

Similarly to the price action, the RSI is caught between a bullish and bearish level. The bullish level is the trendline from the bullish divergence (green line), while the bearish one is the resistance from the 50 line (white). Whether RSI breaks down from the former or breaks out from the latter could determine if BTC breaks out from the descending resistance line.

The six-hour chart is more bearish. 

After the aforementioned rejection, bitcoin failed to hold on above the minor $30,000 area, which was expected to provide support. The area is now likely to act as resistance once more (red icon).

BTC wave count analysis

Despite the bullish divergence and the fact that the longer-term wave count is bullish, the short-term count is bearish.  

The most likely count suggests that BTC has completed an A-B-C corrective structure, in which waves A:C had a 1:0.618 ratio. The high managed to barely deviate above the middle of the current ascending parallel channel. 

A breakdown from the channel would confirm that lower prices are on the horizon.

For Be[in]Crypto’s previous bitcoin (BTC) analysis, click here