- Bitcoin has completed a “failure swing” peak figure.
- Technical indicators have turned bearish.
- The price moves within an ascending parallel channel.
The price of Bitcoin (BTC) has been declining since its peak of $14,100 on October 31.
Several bearish signals suggest that the BTC could fall even faster if it passes under its current ascending parallel channel.
Bitcoin’s failed upper peak
From October 27 to 31, the CLC reached a higher peak of up to $14,100. At the same time, the RSI generated a considerable bearish divergence within the overbought territory. The BTC has since retraced, reaching a local low of $13,220 on November 2.
This decline also caused the RSI to drop further and a “failure swing” peak (i.e. a failure of a higher peak), which is normally considered a sign of a bearish turnaround. In addition, the MACD started to decline created several successive lower bars, which is another bearish development.
Parallel upward channel
The shorter-term, two-hour chart shows that the BTC is trading within an ascending parallel channel. This is probably a corrective movement.
On November 2, the price rebounded to the support line but was rejected by the middle of the channel and fell back to support. This movement also validated a descending line of resistance. The latter has already been validated several times.
The RSI generated bullish divergences but is still below 50. Knowing that the MACD is also in constant decline, a passage under the channel seems to be the most plausible scenario.
BTC wave count
In BeInCrypo’s technical analysis of 2 November, it is written:
The short term account (in blue) suggests that the course has just started wave C, which would complete the above mentioned wave 4 (in orange).
The wave is expected to end between $12,432 and $12,562 (green circle). This is the fibonacci extension 1.61 of sub-wave A (in blue) and the fibonacci level 0.382 of wave 3 (in orange).
In conclusion, the bearish reversal signals and the presence of a parallel channel make it likely that the BTC is in a corrective phase.
If it passes under this parallel channel, it could fall into the $12,432-$12,562 range.