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Bitcoin (BTC) slips to important support area

Bitcoin (BTC) weakened noticeably on July 13, hitting a low of $32,202. Today, the weakened sentiment persists and the price is quickly approaching an important convergence area of several support levels.

BTC trading range

Bitcoin (BTC) has been trading between $31,300 and $40,550 since May 19. The price is currently directly above horizontal support in this range.

The price has been declining since July 12, when it marked a local high of $34,678. During this drawdown, the daily technical indicators have turned bearish.

The MACD is giving a bearish reversal signal and the stochastic oscillator has formed a bearish crossover. The RSI index is under the 50 mark.

Short term channel

On the shorter-term 2-hour chart, bitcoin has been trading inside a descending parallel channel since June 29. Such patterns are usually associated with corrective structures. Moreover, the dynamics of BTC inside this channel looks extremely volatile, making it less likely that we are dealing with part of a bearish momentum structure.

Technical indicators are not giving any bullish reversal signals yet. However, the 2-hour RSI is approaching oversold levels, which has already caused strong bounces during the last month (green icon).

Moreover, bitcoin is trading at $31,640, where the Fibo level of 0.618 retracement and the support line of the descending parallel channel converge.

BTC Channel

BTS chart. Source: TradingView

BTC wave analysis

Wave analysis still does not give a clear picture of what is happening. Bitcoin has been rising since June 22, when it marked a low of $28,600.
However, this rise is clearly represented by a three-wave structure.

You may also like: When will the bitcoin price return to growth? Online indicators

Accordingly, it is hardly the beginning of a new bullish momentum. More likely, we deal with a completed correction or just a part of a corrective structure.

биткоин Bounce

Chart of BTS. Source: TradingView

On the other hand, the subsequent decrease does not look like the beginning of a bearish impulse, but rather is a part of a complex correctional structure. This points to the probability of a new bullish move, which corresponds to the parallel channel we identified earlier.

Correction биткоин

BTS chart. Source: TradingView

The most probable wave scenario assumes that the entire BTC move from the low of June 22 was corrective. In this case, the price is now in the second phase of correction, after which we can expect growth towards the highs of the range.

The current price levels are a convenient springboard for launching a bounce, as the Fibo level of 0.618 correction passes here.

At this stage, the likely scenario seems to be the absorption of the June 26 low of $30,082 before bitcoin starts to rise. This will allow the market to touch the Fibo level of 0.786 retracement.

BTC Channel

VTC chart. Source: TradingView

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