Bitcoin exchange rate barely holds above channel support

Bitcoin (BTC) retreats from the high of $14,100 reached on October 31

There are several bearish signals on the charts, and the price may accelerate the fall in the event of a bearish breakout of the current parallel ascending channel.

False vertex breakout

During the period from October 27 to 31, bitcoin formed an increasing high, reaching the top at $14,100. At the same time, the RSI has formed significant bearish divergence signals in the overbought territory. Since then, the quotes have been declining, marking lows at $13,220.

The RSI also moved in a southerly direction with confirmation of a false breakout of the top, which serves as a signal of a bearish reversal. At the same time, the MACD began to decline, forming several smaller bars, and this is another negative signal.

Chart BTC. Source: TradingView

Parallel Uplink

On the shorter-term (2-hour) charts, you can see that the price is inside a parallel ascending channel, and this dynamics looks like a corrective one. On Monday, November 2, bitcoin bounced off the support line, but rolled back from the middle of the channel and returned to the support line. At the same time, BTC confirmed the descending resistance line for the third time.

The RSI signals a bullish divergence, but remains below the 50 mark, while the MACD is steadily declining, increasing the likelihood of a bearish breakout.

Chart BTC. Source: TradingView

Wave analysis

In its previous bitcoin analysis we wrote that the short-term analysis (blue) suggests that the market has just started wave C, which will complete the aforementioned wave 4 (orange).

The most likely level for the completion of this wave will be the range of $12,432-$12,562 (between the Fibo level of 1.61 expansion of the sub-wave A (blue color) and the Fibo level of 0.382 correction of wave 3 (orange color)).

After a bearish breakout of the channel, the price will move towards its target.

Chart BTC. Source: TradingView


So, the signs of a bearish reversal and the presence of a parallel channel suggest that BTC is at the correction stage.

The rate of decline may accelerate in the event of a bearish breakout of the parallel channel, which will lead the quotes to the target levels indicated above.

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