BTC Tests Lower Boundary Of Wedge as Divergence Continues

BTC is now down by a total of 5.45% over the past week as it sits beneath $48,000
The cryptocurrency is currently trading inside an ascending wedge formation
Bearish divergence with the RSI might be suggesting a breakdown is possible

The bull run for Bitcoin seems to have slowed down a bit since hitting the resistance at $50,000 last week. The cryptocurrency attempted to break $50,000 last Monday but failed to hold above the level and ended up heading lower during the week.

It is now trading inside an ascending wedge formation as the buyers attempt to defend the lower boundary of the wedge. However, the bearish divergence between the price and the daily RSI seems to suggest a retracement is imminent, which is likely to send BTC beneath the ascending wedge pattern and push it lower toward the next support, which is at $46,000 - provided by the 200-day MA level.

The bearish divergence is quite significant because it is the biggest selling signal for the momentum within the market. The divergence has been present throughout the majority of August and seems to be getting stronger - indicating the rollover is imminent.

What has been going on?
Taking a look at the daily chart above, we can clearly see the wedge that BTC is currently consolidating in. The coin surged higher from $37,500 at the start of August as it started its surge higher. Last week, BTC met resistance at $49,400 (1.272 Fib Extension) and started to stall.

It did manage to spike above $50,000 last Monday but failed to close a daily closing candle beyond the $49,400 resistance level. As a result, BTC started to roll over throughout the week to find support at the lower angle of the ascending price channel, where it currently sits.

As mentioned, there is a strong bearish divergence between price action and the daily RSI. While the price of BTC has been climbing higher throughout August, the RSI has been making lower highs. This indicates that there might be an imminent retracement within the market which could see BTC heading to the 200-day MA level at around $46,000.

Bitcoin price short-term prediction: Bullish
The recent price hike over the past three weeks has now turned BTC bullish in the short term. BTC would now have to drop beneath the August support at $37,500 to turn neutral in the short term and would need to continue further beneath $31,500 to be in danger of turning bearish.

Looking ahead, if the bears do break the lower angle of the current wedge, the first support is expected at $46,000 (200-day MA). This is followed by added support at $45,520 (.382 Fib Retracement), $44,000 (.5 Fib Retracement), $42,456 (.618 Fib Retracement), and $40,000.

Where is the resistance toward the upside?
On the other side, the first strong resistance lies at $49,400 (1.272 Fib Extension - blue), which stalled the market last week. This is followed by resistance at $50,000, $50,660, $52,000, and $53,000 (bearish .786 Fib Retracement).

If the buyers continue to drive beyond $53,000, additional resistance then lies at $54,140 (1.272 Fib Extension), $56,000 (bearish .886 Fib Retracement), and $58,000.

To find out more and read an in-depth fundamental overview, take a look at the original article here; coincodex.com/article/12119/bitcoin-price-analysis-btc-tests-lower-boundary-of-wedge-as-divergence-continues/