Yesterday I discussed the importance of the $6,000-$5,800 support zone holding. As of writing this update, the bulls have been able to successfully defend this zone from a decisive breach. There was a brief break below that touched $5,770, however the bulls quickly rejected it with a bounce to $6,240 in under an hour. This does NOT mean the bottom is in. We’ve seen bitcoin trap bulls like this countless times in the past, only to continue the downtrend. For now, it’s a waiting game to see if this bounce was in fact the bottom, or simply more manipulation.
All the key support/resistance areas are still in in play. Looking at the 1 week chart, we can see bitcoin is right up against the descending resistance line it’s tried to break multiple times over the last 2 months.

Zooming in we can see a descend resistance has formed at around $6,175. If the $6,000-$5,800 support holds, bitcoin will likely consolidate between the support and $6,200 until it reaches the larger descending resistance line. If it decisively breaks above $6,175, we might be looking at a trend reversal.

Looking at the 4 hour chart, we can see bitcoin finally broke above the 8 day EMA. The 21 day EMA is now acting as resistance.

We’re still keeping an eye on the 4 hour RSI. As it moves closer to the apex, a larger move, up or down, is very likely.

For now, my primary count still has bitcoin in 5 waves down. This count will be validated if/when bitcoin decisively breaks below $5,800. I’d define “decisively” as the 4 hour candle opening and closing below $5,800. Assuming wave 2 is complete, the target for wave 3 is $5,200.

For now, all eyes are on the $6,000-$5,800 support zone. Let’s see how the next 24-48 hours unfold.

BIAS:
Short Term: Slightly Bearish
Longterm: Very Bullish

I hope this has been helpful. I’d be happy to answer any questions in the comment section below. Thanks for stopping by.

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by Workin2005

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