BTC fell sharply on Feb 2 after being rejected by a weakening resistance line. While it has leappeded at a momentary support level, the rate action shows the probability of more interim downside prior to a turnaround.
Bitcoin has been following a tumbling resistance line afterward spreading to an all-time strong rate of $69,000 on Nov 10. On Feb 1, it was rejected by this resistance line for the third time (red icons) and fell sharply the next day. While this developmentment accelerated the significance of the line, it’s worth noting which resistances get weaker each time they are touched, so an eventual breakout over it would be the most likely scenario.
Assuming that a breakout transpires, the first resistance range would be found at $40,800. This target is a horizontal field which previously acted as support. Above which, the next resistance would be found at $46,700, the 0.382 Fib retracement resistance level.
The two-hour chart shows two main moves.
Firstly, BTC deviated atop the Jan 26 excessive (red line) before tumbling back below it. This is a bearish change which is often followed by a descending shift.
Secondly, it broke down from an increasing support line which had previously been active afterward Jan 27. This likewise supports the probability of more limited falls.
BTC has been provided some support at the minor $36,630 support range, created by the 0.382 Fib retracement support level. The primary horizontal support is found at $35,925, created by the 0.5 Fib retracement level.
BTC wave count analysis
The most likely protracted-term count suggests which the bottom is already in. As for the momentary count, it’s reasonable which BTC is in the process of completing a flat A-B-C correction
Giving sub-waves A and C (black) a 1:1 ratio would lead to a low of $35,871, aligning with the previously schemed support range.
While a leading diagonal is technically further possible, it seems to be much less possible by reason of the sharp drop on Feb 2.
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