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- Bitcoin has created a rising wedge pattern on the 4 hour chart. Corner ventilation, if confirmed, could lead to a drop to levels below $ 10,000.
- The recent US $ 9,467 Bitcoin recovery lacked significant support, so an increasing wedge fracture seems likely. The weekly chart also flashes.
- A significant move above $ 11,000 would invalidate the bearish case and allow an increase to $ 11,500. A weekly close (Sunday, UTC) above 12,000 USD is needed for a bullish bullish rally.
Bitcoin loses altitude after its rejection, near the psychological barrier of $ 11,000 earlier in the day, and could fall below $ 10,000 in the next 24 hours.
The main crypto-currency in market value peaked at $ 10,956 at 00:03 UTC today on Bitstamp, extending its recovery since the August 9th minimum of $ 9,467.
We were expecting an increase of $ 11,000, with the crypto-currency hourly chart signaling a high-volume ascending channel break or a bullish continuation pattern yesterday.
However, the momentum quickly faded, reaching $ 11,000, and prices fell below $ 10,800 at 03:30 UTC. Another wave of sales hit the markets during the European morning session, lowering the BTC to $ 10,550 within 75 minutes at 9:00 UTC.
At the time of writing, BTC is changing hands at $ 10,690 on Bitstamp, which represents a 0.25% loss over 24 hours. Prices are still up more than $ 1,000 from August's low of $ 9,467.
Investors have linked the recent rally to the Bakkt Stock Exchange's Friday announcement of the commissioning of physically settled bitcoin futures on 23 September. believe the new brand a long-term bullish development for Bitcoin.
In the short term, however, it is likely that BTC will fall below $ 10,000, as the recovery from recent lows has turned into a bearish reversal.
4 hour chart
BTC created a rising wedge model on the 4-hour chart, with converging trend lines connecting higher vertices.
The convergent nature of the trend lines represents a weakening of the upward momentum. Therefore, a breakdown is supposed to confirm a bullish to bearish trend change.
At the time of writing these lines, the bottom edge of the slipway is $ 10,494. A 4-hour closing below this level would confirm a growing wedge break – that is, the rebound of $ 9,467 has surpassed $ 11,000 and the bears have regained control.
Corner ventilation, if confirmed, would open the doors at $ 9,974 (horizontal support line). A violation at this location would expose the August 15th minimum of $ 9,467.
The probability that the BTC confirms a wedge decomposition in the next few hours is high, the relative strength index moving away from an upward trend line in favor of the bearish ones. In addition, trading volumes fell by $ 9,467 during the rally, which typically occurs during temporary rebills.
Weekly chart
The 5-week moving average (MA) fell below the 10-week MA, confirming the first bearish cross since February.
The Moving Average Divergence Histogram (MACD) continues to produce low lows and is currently signaling the weakest bullish momentum in six months. The 14-week relative strength index (RSI) also produced a higher low.
The BTC lost 10.49% last week, calling for a larger decline in rejection above $ 12,000 two weeks ago.
In total, BTC may fall below $ 10,000 in the next 24 hours. The bearish case would be invalidated if prices had a 4-hour close above $ 11,000 due to high volumes.
This would indicate a continued recovery from the August 15 trough of $ 9,467 and an increase to $ 11,589 (4 hour chart resistance).
Disclosure: The author does not hold any cryptocurrency assets at the time of writing.
Bitcoin image via Shutterstock; charts by Trading View
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