Bitcoin faces a wave of decline after rising to resistance

The bitcoin (BTC) exchange rate has been strengthening with varying success since September 8 and finally reached the first important Fibonacci resistance level, for which the cryptocurrency has yet to compete.

Perhaps the first cryptocurrency has already completed a bullish pullback or is close to its completion, and will soon resume its decline.

Bearish signals

The bitcoin exchange rate reached a low on September 8 and has been growing ever since. The rise is smooth and uneven, but on September 14, the growth accelerated noticeably, and as a result, the price formed a candlestick pattern of bullish absorption on the charts. Earlier in trading on Tuesday, BTC was marked at a maximum of $10,839, after which it corrected and returned to its original positions, trying to determine the vector of further movement.

The quotes reached the 0.382% Fibonacci retracement level at $10,681, while the 0.5% pullback level is around $10,945.

Technical indicators paint a mixed picture. The MACD is rising, as is the slope of the stochastic oscillator, but there is no bullish intersection yet.

At the same time, the RSI bounced off the level of 50 and may start moving in a southerly direction.

BTC chart from TradingView

False breakout

On the shorter-term charts, there is a predominantly negative picture. The price forms rising highs, but all three indicators in the form of MACD, stochastic oscillator and RSI give signals of bearish divergence, and in the first two cases these signals are particularly pronounced.

All this points to the prospects for a decline in the BTC rate.

BTC chart from TradingView

In addition, the price may have made a false break of the minor resistance of $10,700, which bitcoin was trying to cling to at the time of writing the technical analysis and went into negative territory on the daily charts.

If BTC fails to stay above this level, the cryptocurrency risks returning to the $10,250 support area.

BTC chart from TradingView

Wave analysis

In the technical analysis of September 11, we wrote that on September 2, bitcoin probably began the formation of an impulsive bearish five-wave Elliott structure and is at the stage of wave 4, which is implemented in the form of a complex corrective structure W-X-Y.

At the auction on September 15, the price touched a high of $10,831, while the coefficient between the waves W and Y was 1:1.61 – the usual level for such corrections.

In addition, the 0.5% Fibonacci retracement level relative to the third wave (orange on the chart) is located at $10,951, slightly above the previously mentioned high.

BTC chart from TradingView

A more thorough analysis reveals a correction in the form of sub-waves A-B-C (blue color) inside wave Y, where the ratio between waves A and C is 1:1, and this only increases the probability that the vertex has already been formed.

BTC chart from TradingView

Based on the length of waves 1-3, it is possible to identify possible target levels of the base of the fifth wave – $9983 or $9473 *(in the standard scenario).

The loss of the $9450 level will jeopardize the longer-term positive outlook for BTC.

BTC chart from TradingView

So, perhaps bitcoin has already completed its bullish pullback and will now go towards the $9,700 level, and possibly $9470.

You can read the previous analysis of bitcoin here.

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