Bitcoin bullish wicks on daily candles show buying pressure

Can the bulls keep control or is a deeper retracement around the corner?

Price charts and technical analysis

The BTC/USD daily chart is moving sideways. But buyers are stepping in as soon as price enters the $54-56,000 support zone (blue box).

If we also consider a) uptrend and b) the bullish impulse before (blue arrows), then the bulls still remain firmly in control. Let’s review:

1. Price action needs to break above the previous top and resistance (red box) to confirm an immediate breakout and uptrend continuation (green arrows).

2. An uptrend could confirm a wave 5 (orange) pattern.

3. The larger wave patterns indicate potentially more upside as the wave 5 (orange) completes a wave 3 (grey) of wave 5 (pink) of waves 3 (purple, red, black).

4. A break below the support, however, indicates a deeper retracement (dotted orange arrow). In that case, price action could test the previous wave 4 (orange) bottom (green box). A bullish bounce is expected there (dotted green arrows).

On the 4 hour chart, BTC/USD is either building a new uptrend or a larger correction might take place. Let’s review when we expect one of these two patterns to be confirmed:

1. A bullish breakout (green arrows) above the resistance (orange box) confirms that a wave 4 (light blue) is completed and that price action is moving up for a wave 5. The current chart pattern looks like a bullish ascending wedge pattern.

2. A light pullback (orange arrow) could indicate a larger ABC (green) correction in wave 4 (light blue).

3. A deeper retracement (red arrows) could indicate a change of the wave outlook. The 123 (light blue) pattern is invalid and a larger wave 4’ (orange) is taking place. 

4. The bulls remain in control as long as price action remains above the support zone (21 emas and support trend line (green).

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The analysis has been done with the ecs.SWAT method and ebook.