The Bitcoin (BTC) price increased gradually over the past week and reached a crucial long-term resistance area.The short/medium-term trend is showing weakness, indicating that a corrective move could transpire soon.
Bitcoin Long-Term LevelsThe candlestick for the week of Aug. 10-17 created a bullish hammer and reached its highest weekly close since January 2018. BTC is still trading between the 0.5-0.618 Fib levels of the entire decrease measuring from the all-time highs of December 2017. The exact resistance levels are found at $11,424 and $13,370. The RSI and MACD on the weekly chart are both moving upwards, and neither has generated any bearish divergence and both are still below the overbought region. Therefore, while the momentum is still bullish and has not shown any weakness, the price is trading inside a long-term reversal area.
Triple-TopThe Bitcoin price reached a high of $12,100 on Aug. 2 and dropped sharply the same day. While the price has been moving upwards, it has not broken out above the Aug. 2 high. When looking at the highs on Aug. 2, 10, and 16, it looks like BTC has generated a triple-top, which is normally a bearish reversal pattern. The pattern has already been combined with a bearish divergence in the RSI, visible in two time-frames. The MACD has already turned bearish. Therefore, the daily chart indicates that the price is likely to move downwards. The six-hour chart also supports this possibility. The price has broken down from an ascending support line that had been in place since July 30 and has validated it as resistance afterward. There is a bearish divergence in both the RSI and the MACD, and the latter has turned bearish. If the price begins decreasing, the closest support areas would be found at $11,550 and $11,250.
Wave CountDue to the price movement during the preceding increase, it is possible that the Aug. 2 high was the top of a five-wave impulsive upward move, which is the longer-term wave 3. If so, Bitcoin could be currently completing the B wave from an A-B-C correction (blue). Assuming that the B wave is transpiring inside A-B-C sub-waves (orange), the price could be nearing the top of the move. By measuring the entire upward move and projecting its length to the Aug. 2 high, we can see that the ”2” Fib time level of the upward move falls tomorrow. So, if the price actually does correct to make a C wave down, the movement will most likely transpire within the next few days. The length of the previous smaller upward moves also suggests that the price will soon correct. It is possible that the C wave extends a bit more towards $12,200. If it goes much higher, it would invalidate most bearish counts, and would instead indicate that the price has begun a new impulse. The alternative wave count (bullish) would suggest that the longer-term C wave ended on Aug. 11, and BTC has already begun a new upward move. The formation is unusual since the C wave is extremely short and small, but it is still valid. To conclude, the BTC price is likely nearing the top of a corrective upward move. A move to the downside is expected to transpire before BTC resumes its long-term upward trend. For our previous analysis, click here.
In line with the Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate, unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult with a professional before making any financial decisions.