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Bitcoin is attempting to break out of the near-term descending resistance line. Once successful, the correction can be confirmed as complete.
Bitcoin has been steadily climbing again since Nov. 28, after bouncing up from the $53,350 support area. This area is also the 0.5 Fib (white) support, adding to the belief that the ostrich correction is coming to an end. The bounce confirms this level is acting as support.
Technical indicators are also giving bullish signals. This is especially evident in the MACD.
MACD is an indicator created by short and long-term MA. It is currently positive, which means that the short-term MA is faster than the long-term MA. More importantly, the chart produced consecutive higher candles for the first time since October 2.
Therefore, it is likely that a rally of more than 50% will occur during this time period.
Short term movement
The 6-hour chart shows that BTC is still following a descending resistance line since peaking on Nov. 10.
This line also coincides with the $59,350 resistance area – the 0.382 Fib level. Until the resistance area is broken, the correction cannot be considered complete.
Number of waves
The short-term wave count shows that BTC has completed an ABC correction (red). The correction was completed immediately at 1:1.61 of wave A:C, which is common in such structures.
Hence, an upward move is expected if the correction is deemed complete.
In the long term, the numbers are more likely to show this move as part of a 1-2 / 1-2 big wave formation. In this case, BTC is currently initiating sub-wave three (black) of wave three (yellow), which is usually the sharpest wave. Therefore, a strong upward move could soon follow.
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