Bitcoin (BTC) drops below $ 50,000 after rejection

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Bitcoin (BTC) is currently trading in a short-term correction pattern and could potentially collapse.

BTC has mostly moved higher since its rebound on December 4, just after price hit a local low of $ 42,000. The upward movement led to a high of $ 51,936 on December 7th.

However, the bullish movement served to validate the previous ascending support line as resistance (red icon). Since then, BTC has been declining. The rejection also coincided with the resistance area of ​​$ 52,400, which corresponds to the 0.382 Fib retracement resistance level. It is therefore a crucial area of ​​resistance that could cause further rejections.

On top of that, technical indicators are still bearish.

The MACD, which is created by both short and long term moving averages (MA), is negative and falling. This means that the short term AD is slower than the long term average. Yesterday he finally created a higher momentum bar (green icon), which is a sign that AD has started to gain momentum. However, it remains to be seen if this will be a false signal (green circle), similar to what happened between November 29 and December 2.

The RSI, which is an indicator of momentum, is going down and is below 50. This is considered to be a sign of a downtrend.

Short term BTC channel

The six-hour chart shows that BTC is trading in a parallel channel descending from the all-time high on November 10.

These types of channels are often considered to contain corrective patterns, which means that a breakout of it would be expected.

However, BTC still trades in the middle of the channel (green circle). For the possibility of an escape to gain legitimacy, it would have to reclaim this line.

Unlike the daily calendar, both MACD and RSI increase. However, the former is always negative and the latter is less than 50.

Continuous rebound

Finally, the one hour chart suggests that BTC will collapse in the short term.

The main reason for this is that it is trading in the lower part of an ascending parallel channel. In addition, he touched his support line for the third time.

In the event of an outage, the primary support area would be $ 46,950. This is the 0.5 Fib retracement support level and is a suitable area for creating a higher low.

For BeInCrypto’s previous Bitcoin (BTC) analysis, click here.

Disclaimer All information on our website is posted in good faith and for general information purposes only. Any action that the reader takes with the information found on our website is strictly at his own risk.

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