Bitcoin broke out briefly from its symmetrical triangle, but the price reverted to the pre-breakout range as the leading cryptocurrency couldn’t sustain the upward price movement.
BTC Breakout and Retest
After declining to a local low last month, bitcoin kept trading within a symmetrical triangle. However, it surges above the triangle to reach about $39,500, but the rise was short-lived. It is now back within that triangle, following a gradual fall since that time. (see the red part in the image below). Even though the critical points (MACD and RSI) are still bullish, they might turn bearish soon unless there is a price rally.
BTC back within the triangle. Source: Beincrypto and TradingView
Despite this brief decline, technical indicators on the daily timeframe remain bullish. The critical points keep rising, and the stochastic oscillator will soon make a bullish cross. Also, the divergence trend on the RSI remains unbroken. A continued decrease will lead to a bearish engulfing candlestick which makes today’s movement highly important. As previously indicated, today’s movement will determine whether the short-term indicators will become bearish.
BTC technical indicators. Source: TradingView
The Wave Count Remains Ambiguous
Even though it seems unlikely, the bearish trend is still a possibility. That is because there is no vertical movement over the $40,910 high of the possible c wave (red line below). The wave isn’t defined probably because the E wave is at its longest, considering its time for this E wave to occur. But, it can still be considered a 4th wave triangle so long the high isn’t wiped off.
Possible C-wave. Source: TradingView
Notwithstanding, the bullish trend will likely be maintained. When you consider the triangle as a whole, it is similar in structure to be b section of the a-b-c corrective wave. Hence, it is likely that the price would be on an uptrend even if it drops to or close to the support line. But if the price should decline below the C-wave at about $33,400, it will nullify the established pattern. The above scenario is much less likely as a bounce close to the support at $35,800 is more feasible. Based on the wave count, the direction of the future trend will depend on whether BTC reaches $33,400 or $40,910 first.
BTC chart. Source: TradingView
Musk Shows Up Again
One possible reason Bitcoin couldn’t sustain its breakout might be attributed to Elon musk’s tweet this morning. The leading cryptocurrency price fell by almost $2,100 within few hours after musk’s bitcoin tweet. The electric car billionaire tweeted “#bitcoin,” a broken heart and the image of a couple about to break up. While it is unclear the motive behind musk’s tweet, it is clear that his tweet often influences bitcoin price. It is yet unclear how musk’s tweet will influence the “largest bitcoin event in history” (the 2021 Miami bitcoin event), which is scheduled to start today. Even if the credibility of musk over the crypto bitcoin is in doubt, his influence on crypto price movements is never in doubt.
Elon Musk Tweet. Source: Twitter
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