Bitcoin Price Analysis: BTC/USD Nearing a Descending Wedge Breakout

At the time of writing, BTC was trading at $10,000. Will it continue to decrease or will it find support above $10,000? Continue reading below if you are interested in finding out. For our previous analysis, click here.

Bitcoin Price: Trends and Highlights for September 11

• BTC/USD is trading inside a descending wedge.
• There is support at $10,000 and $9800.
• Bullish divergence is visible in the one-hour RSI.
• The price has created a short-term morning star reversal pattern.
• There is resistance at $10,450.

Current Pattern

A look at the hourly time-frame shows that BTC has been trading inside a descending wedge since September 6. At the time of writing, it was trading very close to the support line of the wedge. The descending wedge is considered a bullish pattern, making a price breakout more likely.

Bitcoin Price Support and Reversal

Taking a slightly longer-term view, we can see two support areas, which are found at:

• $10,000
• $9800

The $9800 support area has gained more significance due to the fact that once the price reached the area it created a long lower wick and immediately moved back upward. Additionally, while the support area of $10,000 has been broken, the price has not reached a close below it. Looking at the 15-minute chart, we can see that the movement during the long lower wick is very similar to a morning star, which is considered a bullish reversal pattern. It was followed by a bullish engulfing candle, indicating that the price might soon begin an upward move.

Bullish Divergence

In order to better analyze the possibility of a reversal, we have incorporated the RSI into the analysis. A bullish divergence has been developing during the most recent lower lows of September 10 and 11. The fact that it is occurring in the support line of a bullish pattern increases its significance. Combined with the rest of our analysis, it makes it likely that a breakout will occur. If it does, where will the price go?

Future Movement

One resistance area is outlined below: It is found at $10,400. We believe it is likely that the price will reach it.

Bitcoin Price Summary

The Bitcoin price has been trading inside a descending wedge. According to our analysis, BTC is likely to reach it. For trading purposes, we consider BTC a buy only for short-term time-frames. For the medium to long term, we still believe the price will reach values close to $9400. Do you think the Bitcoin price will break out from the wedge? Let us know in the comments below. 

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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.