Positive Diversions, Is Reversal Ahead?

After a bearish couple of days, where Bitcoin had discovered a new yearly low, BTC is currently attempting to breach the channel’s upper trend line.

A breakout could lead to a temporary upward continuation, but, since my Elliott wave count suggests that the downtrend isn’t over yet, I am playing it safe. There is another leg down for the wave 5 of 5 of C if my waves count is correct.

With that said, looking at the daily chart, we can notice a new lower low while the RSI indicator creates a higher low. This situation is called positive diversions, and it usually suggests that the bearish momentum is slowly fading away, while a move up is expected.

RSI is a useful tool, however like all other technical indicators; it should be taken with a grain of salt. Price action and trading volume are always the best parameters to look at).

Most of the major Altcions are following Bitcoin at the moment, and we can notice a descending diagonal being developed in many charts. This diagonal could…