Bitcoin Pulls Back, but Holds above $11,200 support

The bitcoin (BTC) exchange rate has broken through an important resistance level, turning it into support. After a short-term pullback, the price should resume its bullish course

Trading Range

The bitcoin exchange rate has been rising since September 8, when it reached a minimum of $9,825. The rally accelerated on October 8, triggering a breakout of the important $11,200 resistance.

Then the quotes formed a lower wick, confirming the support status before a new wave of growth. The local maximum of BTC was fixed at $ 11,731. The next resistance is around $12,000.

BTC chart. Source: TradingView

Short-term weakening

The 6-hour chart shows that despite the rise, the rally has recently begun to show signs of fading. The MACD and the RSI are declining, with the latter giving significant signals of bearish divergence.

Moreover, BTC has formed a long upper wick, which indicates the presence of downward pressure.

BTC chart. Source: TradingView

The 2-hour chart shows a similar pattern, with the RSI giving even stronger signals of bearish divergence, and the MACD has already entered negative territory. At the same time, the price formed a bearish absorption candle after reaching the above-mentioned peak at $11,731.

Minor support passes at $11,300. Its loss may lead to a further pullback in the direction of the 0.5-0.618% Fibonacci retracement levels in the area of $10,894- $11,053.

BTC chart. Source: TradingView

Wave analysis

It looks like bitcoin started its fifth wave (black color on the chart below) on September 8. This wave is implemented in the form of five sub-waves (orange), and at the moment the price is at the stage of the third sub-wave.

In the event of a fall below the second wave low of $10,136, this analysis will lose its relevance. A break down the 0-2 line will also signal the end of the bullish trend.

The probable target of the third sub-wave (orange) is located near the 2.21-2.61% Fibonacci retracement levels of $12,611 -$13,111, while the first preliminary target of the top of the fifth wave is located at $14,000.

The following graph shows the dynamics within the third sub-wave (the waves from the most long-term to the most short-term are indicated in the following colors in descending order: black, orange, blue, red).

BTC chart. Source: TradingView

The third sub-wave consists of a five-wave structure, shown in blue in the graph below. Now the price is at the stage of a minor third sub-wave, which looks stretched and should end in the area of $11,903-$12,230, where the levels of 2.21-2.61% correction of a relatively minor wave 1 are located.

In the case of a fall below the elongated third sub-wave, it will signal the end of wave 4 (red), which fits into the short-term signs of weakening, which are signaled by technical indicators.

BTC chart. Source: TradingView

So, bitcoin has broken through an important resistance and after a short-term decline, it should resume its bullish course.

You can read the previous analysis of 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.


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