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On September 11, theprice made a low of $9943. An upward move followed, materializing in three waves. BTC reached a high of $10,488 on September 13. It has been decreasing since.
Will the Bitcoin price continue its upward move or are there further decreases in store? Continue reading if you want to find out.
For our previous analysis, click here.
Looking at the hourly chart we can see that the Bitcoin price has not been following any clear trading patterns.
However, we can see two resistance areas — the price being inside one of them.
The resistance areas are found at $10,450 and $10,600.
Staying inside the same time-frame, we can see a possible inverse head and shoulders (H&S) forming.
The inverse H&S is considered a bullish pattern, making a breakout more likely.
Until now, the Bitcoin price has completed the left shoulder and the head.
However, the right shoulder has yet to be completed.
A likely price level for it to do so would be at $10,200.
Judging by the height of the pattern, a target for the possible breakout would be at $10,900 — moving well above the second resistance area.
Let’s take a look at a different time-frame to see how this target fits with the longer-term price movement.
A look at the daily time-frame shows that the Bitcoin price has been trading inside a descending triangle since June 26.
At the time of writing, the price was trading close to the resistance line.
Additionally, a closer look at the candlesticks supports further upward movement.
At (1), the BTC price created a bearish candlestick. It was the third such candle in a row.
It followed it by creating a bullish doji at (2), which is often a sign of a reversal.
Finally, the bullish engulfing candlestick at (3) indicated that a reversal may be in store.
This view is strengthened by the fact that the closing prices of (3) were higher than the opening prices of the bearish candle at (1).
The descending resistance line is currently at $10,800, fitting well with the original target of $10,900.
An outline of possible future price movements is given below.
The Bitcoin price could break out and reach the resistance line at $10,800.
Afterward, it is likely to decrease.
The Bitcoin price is, possibly, in the process of completing an inverse head and shoulders pattern.
According to our analysis, it is likely to break out and reach the resistance lien at $10,800.
For hypothetical trading purposes, if the price drops to create the right shoulder, we would consider buying at $10,200 with a target of $10,800.
Do you think the Bitcoin price will break out? 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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