Bitcoin began to increase on April 11 and proceeded to reach a local high of $41,561 on April 13. However, it was rejected and decreased sharply the next day.
This decrease created a bearish engulfing candlestick (highlighted). This is a type of candlestick pattern in which the entire previous increase is negated within one day.
Following the creation of this pattern, further decreases could occur.
The daily time frame paints a bearish outlook for BTC due to the decreasing MACD and RSI. The former is already below 50 while the latter is negative. These are considered signs of a bearish trend and suggest new lows are likely.
The six-hour time frame gives some signs of a relief rally. It shows that the RSI is extremely oversold and has begun to move upwards. Its trendline is also still intact. A similar occurrence is visible in the MACD.
If the BTC price were to make a lower low, it would likely generate a significant bullish divergence as a result.
The long-term wave count suggests that an eventual upward move toward $50,000 is expected.
However, BTC is still correcting in what seems to be an A-B-C structure (red). So, a potential target for the bottom of this movement is found near $37,000. This would give waves A and C a 1:1 ratio and would coincide with the support line of an ascending parallel channel.
After the correction is complete, BTC could begin moving up toward $50,000.
The short-term count suggests that BTC has completed sub-wave four (yellow). Using the length of wave one (yellow) and the external retracement of wave four (black), a similar target of $37,800-$37,600 is given for the bottom of the correction.