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Bitcoin Rallies Unconvincingly from Below $10,000

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Written by
Valdrin Tahiri

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Edited by
Kyle Baird

10 September 2020 08:36 UTC
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  • Bitcoin has been rallying since hitting a local low of $9,875
  • There is a considerable bearish divergence in short-term indicators.
  • The BTC price is likely still in wave 4, which could end near $10,480.
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Bitcoin (BTC) has been increasing since it reached a low of $9,825 on Sept 5.

The rally does not appear to be very convincing though and suggests that another drop below the aforementioned low is likely to transpire.

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Bitcoin Rally Shows Weakness

The Bitcoin price has been increasing since a low of $9,825 on Sept 5. This move to the upside was preceded by a considerable bullish divergence in the RSI in time-frames up to the six-hour.

However, while the price is currently trading at $10,300, the rally is showing weakness.

There is a bearish divergence in the MACD, RSI, and stochastic RSI, and the latter has made a bearish cross. This is a sign that the rally is expected to end and the price will soon head downwards.

Bitcoin Bearish Divergence
BTC Chart By TradingView

The hourly chart gives a similar outlook, since there is an even more pronounced divergence in all three indicators, and the RSI and MACD are decreasing considerably.

If the price breaks down from the current short-term ascending support line, it would likely confirm that the price is heading lower.

Bitcoin Weak Rally
BTC Chart By TradingView
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BTC Wave Counts

The most likely wave count is that BTC began a bearish impulsive five-wave formation on Sept 2, and is currently in wave 4 (in orange below).

Due to the time of wave 4 relative to the preceding wave 3, it is likely that the price is correcting in a complex W-X-Y structure (in red). The target for this wave to end would be near $10,490, based on the length of wave X.

Bitcoin Long-Term Count
BTC Chart By TradingView

A closer look at wave Y gives a very similar target, indicating that the price will soon reach a top. A breakdown from the ascending support line outlined in the first section would confirm that the price has begun its downward movement.

Bitcoin Short-Term Count
BTC Chart By TradingView

To conclude, the Bitcoin price is expected to increase towards $10,500 before breaking down to the $9,500 region.

For BeInCrypto’s previous Bitcoin analysis, click here!

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