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On July 2, 2019, theprice made a low of $9652. A gradual uptrend followed. After a brief pause on July 5, BTC continued to increase.
On July 10, it briefly reached values above $13,000.
Will the BTC price continue its increase or is there a reversal in store? In this article, we will analyze the Bitcoin price in different time-frames alongside technical indicators in order to answer this question.
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For our previous analysis, click here.
Since reaching the aforementioned low on July 2, the BTC price has been increasing, trading inside the ascending wedge outlined below:
At the time of writing, it was trading right on the resistance line of the wedge.
Furthermore, using a Fibonacci retracement tool from the $13,764 high of June 26 to the July 2 low, we can see that the Bitcoin price is also at the 0.786 fib level, which is likely to provide resistance.
Additionally, a look at the RSI and the MACD, shows that bearish divergence has started to develop in the short-term:
The divergence began on July 9, when the BTC price reached a high of $12,800. BTC created a higher high on July 10, while both the RSI and the MACD generated lower highs.
The fact that the divergence is occurring at the resistance line of a bearish pattern affirms its validity.
The use of these indicators and the current price pattern makes it likely that the price will drop towards the support line of the wedge.
A look at the daily chart shows that since the rapid drop on June 27, BTC has rebounded nicely and has created five bullish candles in a row, starting on July 6.
However, we can see that the daily candles that have reached values above $13,000 have been characterized by long upper wicks, indicating that there is significant selling pressure at that level.
This was visible on the candles of June 26-27 and the current candle of July 10.
The 10- and 20-day MAs seem to have rejected a bearish cross, and are now moving upward, possibly providing support to the price.
A rejection of a bearish cross is a very positive sign for the market. However, they are still close to each other. Since MAs are lagging indicators, a rapid price decrease could cause a cross in the next few days.
Additionally, the RSI and the MACD give a bearish outlook.
While the Bitcoin price is trading at a similar level to the closing price of the highs reached on June 26 and 27, both the RSI and the MACD have generated significantly lower values.
Therefore, it is possible that the price creates a double top, which is considered a bearish reversal pattern.
The BTC price is trading inside a short-term ascending wedge.
Moving averages give a positive outlook.
However, momentum indicators suggest that the rally is losing its power and that the price is possibly making a double top.
According to our analysis, BTC is likely to drop towards the support line of the wedge. A breakdown cannot be ruled out.
Do you think the Bitcoin price will break down from the wedge? Let us know in the comments below.
Disclaimer: This article is not trading advice and should not be construed as such. Always consult a trained financial professional before investing in cryptocurrencies, as the market is particularly volatile.
Images are courtesy of Shutterstock, TradingView.
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