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From yesterday’s high at around $4130 the price of Bitcoin has decreased by around 3% at first as it came down to $4004 at its lowest point yesterday. Since then the price has made a slight recovery and is currently sitting at around $4060 level.
On the hourly chart, you can see that the price of Bitcoin fell below the descending trendline which is the resistance line of the falling wedge of a higher degree and was back inside its territory until today recently when another increase has been made above it.
As you can see the price is currently retesting the broken horizontal support level which is only a minor one an isn’t as significant as the falling wedge resistance line, but considering that we haven’t seen an impulsive, decisive move to the upside we still cannot say that a breakout occurred, particularly because the price has found itself in a tight spot between it and the horizontal support level which serves as resistance.
The price of Bitcoin has ended its five-wave Minuette wave to the upside around the 0.786 Fibonacci level whos intersection with the falling wedge resistance proved to be a significant resistance point as the price immediately started plummeting down from the interaction with the $4130 area.
This means that we are most likely seeing the start of another structure to the downside as the five-wave move to the upside ended which was the corrective C wave from the Minute ABC correction to the upside and is the second Minute correction after the higher degree five-wave impulse ended.
Zooming out on to the 4-hour chart we can see that the price of Bitcoin came up to the first significant resistance area slightly lower than the Intermediate wave Y ended which already occurred after the Intermediate W wave ended which was the second Minor X wave from a correction of a lower degree.
We can now also see a similar structure developing like after the presumed Intermediate W wave which is why I believe that we are to see the Intermediate correction getting prolonged by two more wave – X and Z.
If this is true, then the price of Bitcoin is now heading to the downside for interaction with some of the significant support points and if we are seeing the development of the second wave X then we are going to see the price of Bitcoin potentially going down to around $3600 where the lower ascending trendline is.
First, interaction with the upper support level would be expected which if happens would bring the price of Bitcoin to $3900 but that would only be a short stop as the price is now most likely starting move impulsively to the downside in a five-wave manner, which would be the third Minor Y wave from the second Intermediate wave X.
We could be seeing the start of a trend continuation altogether in which case I would be expecting a breakout to the downside from the ascending triangle which was formed by the Intermediate correct but more on that in due time.