During the week of June 22-29, the Bitcoin price created a small bearish candlestick with wicks on both sides, slightly longer on the upper.
This makes for the third bearish candlestick since the price was rejected by $10,380 on June 1, a sign that the upward trend has lost strength.
Weekly Bitcoin Close
Since creating a shooting star candlestick on the week of June 1-8, BTC has created three successive small bearish candlesticks. The shooting star is normally considered a bearish signal, especially when occurring after an upward trend. The three bearish candlesticks that followed also support this possibility.
Furthermore, the price is following a long-term descending resistance line that has been in place since December 2017 and rejected the price a handful of times since. Furthermore, the price was also rejected at the $10,500 area, creating a bearish divergence in the weekly RSI.
These are all signs that the price will go down. While a short-term bounce that validates the resistance line and possibly creates a long upper wick could be expected, the price should eventually fall and decrease towards $7,000.
Beginning June 22 with a high of $9,778, the Bitcoin price slipped over five days before hitting a low of $8,835 on June 27. This is in line with the pattern of lower highs that have been created since June 1.
The most likely move from this level would be a re-test of the minor $9,300 resistance area, which is also the 0.5 Fib level of the entire drop. Afterward, BTC would be expected to continue its downward movement towards the range low at $8,500, which has not been seen since May 13.
The short-term chart supports this possibility for several reasons.
First is the high volume during the long lower-wick of June 27, a sign of strong buying pressure. Then, there is the reclaim of the minor $9,050 area, which is now likely to act as support once more.
If the price breaks out from the descending resistance line it has been following since June 25, it would mean that it has begun the minor upward move towards the $9,300 resistance outlined in the previous section.
For our previous analysis, click here.
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