Bitcoin (BTC) price has seen a significant increase since June 15th, reaching its highest point of the year on June 23rd. However, it has decreased slightly since then.
This bullish trend indicates that the lowest point in the Bitcoin cycle is likely to be reached. If so, the price is expected to continue rising at a faster pace towards new yearly highs. Last week’s close to the upside is a step in the right direction for this forecast.
Has Bitcoin Confirmed Its Bullish Trend Reversal?
According to the technical analysis on the weekly time frame, BTC price has reached the major resistance level at $30,000. This level has played a crucial role in Bitcoin over the years, acting as support and resistance at various times since January 2021.
BTC price has been rising since June 15, when it bounced at the $25,000 horizontal support area (green symbol). The price is currently trading just above the $30,000 resistance area.
The fact that the price has already closed above it supports the possibility of completing the correction and starting a new upward movement.
Furthermore, the weekly RSI is giving a bullish reading. The RSI is a momentum indicator that traders use to assess market conditions and decide whether to buy or sell an asset, which also indicates an uptrend.
A reading above 50, along with an upward trend, indicates that buyers still have an advantage, while a reading below 50 indicates the opposite. Currently, the RSI is above 50 and rising. It recently bounced from the 50 line two weeks ago (green circle), indicating an upward trend.
The fact that the RSI bounced simultaneously as the price supports the uptrend.
The long-term wave count gives a bullish prediction for the price of BTC
A more detailed daily time frame analysis reveals a strong positive outlook due to both wave count and price action.
To analyze price patterns and investor psychology, technical analysts often use the Elliott Wave theory, which helps them identify recurring price patterns over the long term and predict trend directions.
The number of waves indicates that BTC price is in the third wave of a long-term (black) five-wave increase. The third wave is usually the most intense of the bullish waves. The number of subwaves is given in white.
If we assign a ratio of 1:1 to the first and three waves, a rally can be expected near $42,700. If the third wave extends and reaches 1.61 times the length of the first wave, the price is likely to reach $53,600.
The price action also supports this number. More specifically, a breakout from the descending parallel channel is a sign of the start of a new upward movement. Since such channels contain corrective structures, the movement within them is likely to be part of the second corrective wave.
Is Bitcoin’s Local Bottom Inside?
Since the long-term readings are decisively bullish, looking at the short-term six-hour time frame can help determine where a bottom will appear in the short term.
In line with the long-term outlook, the short-term is also showing signs that a local bottom is inside.
First, the movement since the top of the first sub-wave looks like a completed ABC correction (red). In addition, the correction took the same length as the previous upward movement.
It is unusual for a correction to be much longer than the previous rally, especially when the retracement is shallow, as in the case of BTC.
So, the most likely future forecast is that the BTC price will not fall below $29,000. Instead, you’ll keep increasing it to $40,000 and beyond.
Despite this bullish prediction for BTC price in the long term, a move below the bottom of the first sub-wave at $24,800 (red line) would mean that the trend is still bearish. In this case, a drop to $20,000 is likely.
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In line with Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate and unbiased reporting, but market conditions are subject to change without notice. Always do your own research and consult with a professional before making any financial decisions.