Bitcoin Price Hits Second Highest Weekly Close — Why Isn’t BTC Sentiment More Bullish?
Why Isn't Bitcoin Sentiment More Bullish? | Credit: Getty Images
Key Takeaways
- Bitcoin’s price reached the second highest weekly close ever in the first week of June.
- The weekly MACD has given a bearish signal similar to the one in the 2021 high.
- After four failed breakout attempts above $70,500, will the fifth one be successful?
The BTC price reached a high of $71,887 on June 7, less than 4% below the all-time high price of $73,777. However, it has fallen since and trades below $69,500.
Bitcoin’s continued failure to break out above the $71,500 area and reach a new all-time high are worrisome for the bulls, casting doubt as to whether the Bitcoin price is still correcting or if it has started a new upward movement instead.
What Does Bitcoin’s Weekly Close Mean?
The Bitcoin price reached a weekly close of $69,640 last week. This was the second highest weekly close ever, behind only that of March 25 – April 1, when the price reached a weekly close of $71,285.
Despite this positive weekly close, the end of the week was characterized by a notable price decrease and creation of a long upper wick. This is the fifth such wick being created close to $72,000 (red icon), implying that bulls cannot push the price above this resistance.
Despite the wick, the price action also shows bullish signs. When using weekly closes to determine horizontal levels, the BTC price trades above both resistances that created the previous all-time highs, namely the $60,000 and $65,000 resistances. These areas a likely to provide support.
However, the MACD gives a bearish signal. This is visible by the bearish cross between the MACD and signal lines (green). In 2021, this signal twice marked the beginning of a downward trend. While in 2023 it marked the bottom, the BTC price movement is more similar to that of 2021 than 2023. This is because it was at an all-time high in 2021 and just beginning its increase in 2023.
Nevertheless, the price movement is not identical to 2021. In both previous bearish signals, BTC reached a top at most two weeks after a signal and started a momentous decline. To the contrary, there have been five weeks since the bearish signal.
Bitcoin’s Four Unsuccessful Breakout Attempts
The daily time frame Bitcoin price chart carries one with the mixed readings. From the bullish perspective, the BTC price broke out from a descending parallel channel and a symmetrical triangle. The channel breakout was especially critical, since the pattern had contained the decline since the all-time high.
Then, the breakout from the short-term triangle confirmed the long-term breakout. During this time, the RSI moved above 50 and the MACD moved above 0.
From the bearish perspective, BTC has made four unsuccessful breakout attempts above $71,500. Even though resistances get weaker each time they are touched, the most recent rejection on June 7 created a large, bearish candlestick as a result of a strong rejection.
More importantly, BTC just broke down from a 37-day descending resistance trend line, a sign that the upward movement has ended.
BTC Price Prediction: What Does the Wave Count Say?
The wave count further extends the pattern of mixed readings. The wave count favoring the bulls suggests the price is in the fifth sub-wave (black) of wave three. If the count is accurate, the BTC price will reach its high between $80,550 and $84,150.
The lower limit of the target is found by giving wave three 3.61 times the length of wave one. The 1.61 external Fibonacci retracement of sub-wave four gives the upper limit of the target.
The issue with this count is the extreme elongation of wave three.
The short-term six-hour time frame gives the minor sub-wave count. In this bullish possibility, BTC started its bullish trend reversal on May 1 and is currently completing the minor sub-wave four, which is being created inside an ascending parallel channel.
A breakout from the channel and $71,500 long-term resistance area will confirm the count. Then, a target of $79,900-$82,450 is given by various Fibonacci levels.
So, the bullish count predicts a high somewhere between $80,000 and $84,000. A decrease below the minor sub-wave one high of $65,500 will invalidate this count.
On the other hand, the count that favors the bearish suggests the price is correcting inside wave four, which has taken the shape of a triangle. In this count, the BTC price will continue consolidating inside a triangle until August-September before eventually breaking out.
The main difference between these two counts is that wave three started in June 2023 in the bearish one, while it started in September in the bullish one. Hence, the bearish count suggests that wave three has already ended and the price is correcting inside wave four.
As outlined before, a breakdown below $65,500 will confirm the bearish count is transpiring while a daily close above $71,500 will mean the bullish one is correct instead.
Bitcoin’s Trend Depends on the $71,500 Level
The price action, technical indicators and the wave count all give mixed readings. So, the BTC trend remains unclear. If BTC breaks out above $71,500, it will confirm the trend is bullish and can lead to a new all-time high. On the other hand, a decrease below $65,500 will instead confirm that bears are in charge. Then, a continued correction will be likely.
