On July 17, 2019, the Bitcoin (BTC) price reached a low of $9084. An upward move ensued. On July 21, it reached a high of $11,098. Since then, it has been slowly decreasing. The decrease culminated with a low of $9101 reached on July 29.
Will BTC break down below $9000 or is a reversal in store? Keep scrolling if you want to find out.
For our previous analysis, click here.
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Bitcoin Price: Trends and Highlights for July 30
- BTC/USD is trading inside a descending wedge.
- There is a very significant support area at $9200.
- There is short-term bullish divergence developing.
- Finally, there is resistance at $10,700.
Descending Wedge
A look at the daily time-frame shows that BTC has been trading inside a descending wedge since the beginning of July. The descending wedge is considered a bullish pattern, making price breakouts more likely.
Additionally, we can see that a strong support area has been created near $9200.
The price has reached it on two occasions, July 16 and 28.
Both times, the Bitcoin price immediately increased, creating long lower wicks.
This is a sign that there is strong buying power at that level.
Will it be enough to initiate a breakout?
Signs Of a Reversal
A look at moving averages (MA) gives an ambivalent response.
First, we can see that the short-term moving averages have made a bearish cross.
The 10-day MA is providing close resistance to the price.
However, we can see that the 100-day MA is moving upward, and has almost reached the aforementioned support area.
This would further increase its significance, making it very unlikely that it will be broken.
This view is supported by a closer look at the daily candlesticks.
We stated before that the BTC price reached the support area on July 28.
Once it did, it created a bullish hammer candlestick.
When found in a downtrend, it is often the first step in a reversal.
Let’s take a look at the short-term and see if that is likely.
Short-Term
A look at the two-hour time-frame shows that the price is following a short-term ascending support line.
However, the line is not clearly defined, so it is possible that the price will follow a slightly different slope.
The developing bullish divergence, however, is clearly visible.
The MACD has been generating divergence since July 25, while the RSI has done so since July 29.
While in a vacuum this short-term divergence would not be sufficient in predicting a breakout, when combined with a bullish pattern and a very significant support area, it makes it likely that the BTC price will break out.
Future Movement
If the Bitcoin price breaks out, possible future price movement is outlined below.
The closest resistance area is found at $10,700.
We believe that the price will eventually reach it.
However, it is possible that it will again drop to the support area before initiating an upward move and breaking out.
Summary
The Bitcoin price is trading inside a descending wedge. It is very close to a significant support area. According to our analysis, it is likely to break out from the wedge and reach the resistance area outlined above. Do you think BTC will break out 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 TradingView.
