On September 22, BTC rose significantly, forming a bullish engulfing candlestick in the process.
The $40,820 support area was also verified by the bounce. This area is the support level for the 0.5 fib retracement.
It is now being resisted at $44,000. Previously, this section served as a source of support.
Despite a significant recovery and the formation of a bullish candlestick, BTC technical indicators remain negative. The RSI is below 50, the MACD is falling, and the Supertrend line is pointing downward.
$38,000 is the value of the next closest support area. This area is a horizontal support region and the 0.618 Fib retracement support level.
A downward parallel channel may be seen on the six-hour chart. Corrective structures are frequently present in such channels.
BTC bounced off the channel’s support line on September 21. It’s now in the channel’s center, corresponding to the $44,250 resistance level (0.5 Fib retracement resistance level).
While the MACD and RSI are both indicating a positive reversal, none has verified it. To establish the likelihood of a breakout, BTC must retake the channel’s midpoint and validate it as support.
The movement is evolving into a wedge-shaped formation on the minute chart, indicating that it might be a leading diagonal.
As a result, the most likely move would be a breakdown from the wedge, followed by the formation of a higher low and then an upwards continuation.