Bitcoin (BTC) Price Analysis: July 21, 2021

Bitcoin (BTC) fell on July 20 but rose after forming a double bottom pattern.

This is a bullish pattern that often leads to upward moves. However, there are a lot of resistances that need to be cleared before the price confirms an upside reversal.

Bitcoin double bottom formation

BTC has been falling along a descending resistance line since June 29. It was last rejected by the trendline on July 12.

It dropped to $29,200 on July 20 and formed a double bottom pattern from June 22 low. Following this, the price rallied and reached $30,900.

However, technical indicators are still bearish. Although both the RSI and MACD are showing bullish trend signs, the first is below 50 and the second below 0.

BTC needs to break out of the descending resistance line to confirm the reversal.

Source: TradingView, BTC double bottom pattern

Similar to the six hour time frame, the technical indicators on the daily time frame are still bearish. The MACD is below 0, the RSI is below 50, and the Stochastic RSI is bearish.

The first area of ​​resistance is located at $31,300. This is the previous support area of ​​the range that has been in effect since May 19.

If BTC succeeds in breaking above this level and then the descending resistance line, the next area of ​​resistance will be found at $36,000. This is a horizontal resistance area and the middle line of the trading range.

BTC trading range
Source: TradingView, BTC trading range

Bitcoin wave count

The wave count shows that BTC is in wave C of the corrective structure. The main reason for this is that the previous decline was gradual and volatile, suggesting that this is probably a corrective rather than a bearish one.

BTC retraced further from the 0.85 Fib retracement support level (white), making it a valid correction.

The two most likely targets for the crest of wave C are $37,278 and $42,181. The first gives the A:C waves a 1:1 ratio, while the second gives them a 1:1.61 ratio.

A drop below the July 20 low of $29,279 would invalidate this particular wave count.

wave count
Source: TradingView

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