Bitcoin prepares for new bullish breakout after completing ABC
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Bitcoin (BTC/USD) has made a bearish retracement to the 144 ema close. The strong bullish bounce indicates that the uptrend is probably far from over.
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The BTC/USD finally made a pullback after a strong surge up. The previous bounce at the 144 ema was when price broke above the $40k level and retraced back around $29k.
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Considering the bullish momentum and trend, this swing up could be just a first step of multiple waves 3.
Let’s analyse the wave and chart patterns to understand the next potential price swings.
Price charts and technical analysis
The BTC/USD finally made a pullback after a strong surge up. The previous bounce at the 144 ema was when price broke above the $40k level and retraced back around $29k.
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Now price action also completed an ABC pattern (blue) as part of a wave 4 correction (orange).
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The buyers were able to find support at the 144 ema and 38.2-50% Fib zone (blue box).
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Price action is now testing a key resistance level (orange). A bullish breakout could confirm the restart of the uptrend.
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The first main target is the previous high around $57k.
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If price action breaks the top, then $65-75k are on the horizon.
Considering the bullish momentum and trend, this swing up could be just a first step of multiple waves 3.
On the 1 hour chart, price action completed a bearish ABC (blue) in wave 4 (orange). Now price action is an uptrend channel.
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A bullish break is first aiming at the resistance levels (orange boxes).
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Bull flag patterns (green/grey arrows) indicate an uptrend (green arrow).
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If price action bounces heavily at the previous high (red arrows), then a retest of the previous bottom is likely. This could create a larger ABC (black) in wave 4 (orange).
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Only a sudden decline would indicate a deeper correction first. But for the moment, a bullish breakout is likely.
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The main question is how price action will respond to the previous top? Will it break and continue or will the wave 4 expand?
The analysis has been done with the ecs.SWAT method and ebook.
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