Bitcoin exchange rate corrects after rally

On October 28, the bitcoin (BTC) exchange rate turned sharply to the south and corrected from a high of $13,864 to a low of $12,892

Despite the fact that the price remains above the support level, the overall dynamics show that in the future bitcoin will fall.

Daily drop

On Wednesday, October 28, the first cryptocurrency formed a candlestick pattern of bearish absorption, touching a low well below the previous opening level. At the same time, a long lower wick appeared on the chart. The candle indicates weakening signals, but the top has not yet been confirmed.

The MACD has started to decline, but while the momentum looks restrained, the RSI does not signal a bearish divergence, and the stochastic oscillator has not yet begun to decline.

In the event of a fall in the BTC rate, the nearest significant support is expected at $12,000. At the time of writing the analysis, there were no clear signs of a retreat to this level on the daily charts.

Chart BTC. Source: TradingView

Current range

The 6-hour chart shows that the fall was preceded by significant bearish divergence signals from the RSI.

This caused a drop to the previous resistance zone of $13,130, which turned into support. In the event of a bearish breakout, the next support is expected at $12,770, followed by long-term support at $12,000.

Chart BTC. Source: TradingView

Despite the rebound from the $13,130 area and the formation of a bullish hammer, the pullback looks corrective after an unsuccessful attempt to test the 0.5% Fibonacci retracement level at $13,378, where the resistance is now located.

As long as the quotes do not turn this level into support and do not overcome the 0.618% Fibonacci retracement level at $13,493, the most likely scenario is a fall to the aforementioned support of $12,730.

Chart BTC. Source: TradingView

Wave analysis

It seems that BTC started an impulsive bullish move on September 7 (orange in the chart below) and is currently near the top of wave 3, which has already ended. The sub-wave structure is shown in blue on the graph.

The preliminary target of wave 3 passes at $14,360 – the level of 3.61% of the Fibonacci correction relative to the length of wave 1. Sub-wave 3 (blue color) ended at the level of 3.61% of the correction relative to sub-wave 1, and perhaps a similar situation will develop in the case of wave 3.

Also, in the area of $13,950, there is an intersection of the Fibonacci levels, which, combined with the resistance on the weekly chart, speaks in favor of the formation of the top.

Due to the fact that the sub-wave 5 was very short, bitcoin is likely to form the final maximum before the start of the corrective movement.

It is important to note that wave 3 has been going on for more than 34 days. If the price has already reached the top and started a correction, it should last at least 13 days.

The most likely level of completion of the correction is at $12,000, where the 0.5% Fibonacci retracement level relative to wave 3 and the channel resistance line connecting the lows and highs of waves 1-2 are located.

If bitcoin has not yet formed a maximum, the 0.5% pullback level should be slightly higher.

This analysis will lose its relevance if it falls below the maximum of wave 1 at $11,193 (the red line on the chart).

Chart BTC. Source: TradingView

You can read the previous forecast for bitcoin here.

Disclaimer: Cryptocurrency trading involves a high level of risk and is not suitable for all investors. The opinions expressed in this forward-looking statement do not reflect those of the BeInCrypto editorial board.

Disclaimer


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