Bitcoin breaks $60k but here’s why $55-56k zone is critical

What is in store for digital gold? Let’s review the current wave and chart patterns.

Price charts and technical analysis

The BTC/USD bullish break is part of a strong uptrend channel. But the key and decisive factor is the support zone (green box). Here’s why:

1. The support zone (green box) is extra strong because of the a) consolidation zone, b) the 21 ema zone, c) the shallow 38.2-50% Fibonacci levels, and d) support trend line (green).

2. A bullish bounce at the support zone confirms that the bulls are fully in control (green arrows). An immediate uptrend continuation is expected.

3. A bearish breakout (orange arrows), however, makes the bullish variant less likely. This could indicate that the wave 4 (pink) is still ongoing.

4. With a wave 4’ (pink) developing, price action could be building a bullish abc (black) within wave B (black) of a larger ABC pattern.

5. The bearish retracement is expected to unfold in 5 waves and aim at the previous wave A bottom and 138.2% Fib around $45-50k.

6. A bullish trend is expected to restart at this support zone (blue arrows).

7. At the moment, price action needs to respect the $55-56k support zone for the immediate uptrend to stay intact.

On the 1 hour chart, we can see multiple wave 3s developing as long as the pullback remains shallow. A price decline to test the Fib seems imminent (brown arrow). Let’s review:

1. A bullish bounce at the Fibonacci levels (green box) could start a triangle pattern (green arrows) or an immediate uptrend (blue arrow).

2. A bearish breakout places the uptrend on hold (yellow button).

3. A deeper retracement invalidates the current wave outlook (red button). This means that more downside correction (orange arrows) is expected. A 5 wave pattern could indicate a wave B (black), complete wave C (black) of wave 4’ (pink), and reach the support (blue arrow).

4. An immediate bearish breakout (red arrows) could indicate the start of a larger retrace.

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The analysis has been done with the ecs.SWAT method and ebook.