The Bitcoin (BTC) price reached a local high of $10,940 on Sept 15, but was rejected by an important Fib level resistance and decreased slightly.
At the time of press, BTC was making another attempt at breaking out.
Bitcoin Gets Rejected
Since it reached a local low on Sept 8, Bitcoin has been gradually increasing. The movement can be contained inside a parallel ascending channel inside of which the price is currently very close to the resistance area.
In addition, yesterday’s high of $10,940 validated both the resistance line of this channel and the 0.5 Fib level of the entire decrease, making it a likely reversal level.
Technical indicators are showing weakness. There is a considerable bearish divergence in the RSI, and the MACD has begun to decrease considerably, possibly getting ready to cross into negative territory.
The daily chart also indicates that the upward trend has not yet been confirmed. While the MACD is increasing, the RSI is possibly facing resistance at 50. In addition, the Stochastic Oscillator has not yet made a bullish cross.
Unless the price is successful in completing the following, this is likely to be a retracement, rather than a new upward trend:
- Breaking out above the 0.618 Fib level at $11,200, a level which also previously acted as support
- Stochastic Oscillator makes a bullish cross
- RSI moves above 50
Wave Counts
Beginning on Sept 2, BTC likely began a bearish impulsive five-wave formation (in orange below) and is currently in wave 4. The two most likely levels for the wave to end would be at $10,937 (0.5 Fib level and current high) or $11,199 (o.618 Fib and previous support).
The fourth wave is transpiring inside a complex w-x-y corrective structure (red).
A closer look at the Y wave reveals an A-B-C formation (blue). The length of the waves supports a high of $11,200 being reached as that would give the C and A waves a 1:1.61 ratio, which is common during A-B-C corrections.
In addition, we can see that the C wave is in the fifth and final sub-wave (red). If the ascending support line that connects the bottom of sub-waves 2 and 4 is broken, it should confirm that the upward correction has ended.
To conclude, the BTC price looks to be nearing the end of the correction, which is expected to occur near $10,930 or $11,200.
For BeInCrypto’s previous Bitcoin analysis, click here!
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