Hello and welcome to another Bitcoin update! Today, we'll take a closer look at the 4-hour time frame to understand the current wave structure and potential movements.
Bigger Picture: Fourth Wave Correction
We're still in the fourth wave correction that began on March 13th. Here's a breakdown of the wave movements:
- A-Wave: The initial decline, which bottomed around April 18th near $59,400.
- B-Wave: A flat structure that topped on June 7th.
- C-Wave: The current move to the downside, which looks incomplete.
Despite Bitcoin entering the orange support region again, and the RSI on the daily chart being oversold, the move down seems incomplete. The recent rally appears corrective and remains below resistance, indicating further downside potential.
Orange Support Zone: A Key Element
The orange support zone has been a critical support level since the market topped in March. It has consistently provided support, with multiple bounces occurring within this area. For those not professional traders, scaling into this support zone can be a convenient way to trade.
Trading Strategies
One effective strategy is to scale into the support area and sell into resistance. Here's how it works:
- Buy incrementally as the price moves into the support area.
- Sell incrementally as the price rallies into resistance.
This approach allows you to build a position when the price is in the support area and take profits as the price moves up.
Recent Trend Line Breaks and Resistance Levels
We've seen several trend line breaks recently, providing potential trading setups. For example, a trend line break yesterday indicated a low in the third wave, leading to a fourth wave rally. The uptrend remains intact, but we are now approaching the next resistance level.
Micro Structure and Support Levels
The micro structure in this correction is unclear. The placement of the B-wave could vary, making it tricky to determine the exact wave pattern. Here’s what to watch for:
- Resistance Levels: The next key resistance level to break is $65,535. A break above this level would suggest that the low is in.
- Support Levels: Pay attention to the trend lines and the 38.2% retracement level at $62,626. If we see a wave up and a shallow B-wave down, the 100% extension target is around $63,820, with the 61.8% extension at $62,580.
Conclusion: Key Levels and Trends
Currently, the trend is up short-term, but pay attention to:
- The next resistance levels at $62,626 and $65,535.
- A break below the trend line and a decline in five waves could indicate that wave five to the downside has started.
That's my update on Bitcoin! If you enjoyed this update, please hit the like button and leave a comment.