Bitcoin breaks above $ 11,000 but bounces back

Bitcoin breaks above $ 11,000 but bounces back

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Contents

Bitcoin breaks above $ 11,000 but bounces back
CONTENT

  • Bitcoin trades within a short-term upward parallel channel.

  • Near-term indicators are showing signs of weakening.

  • It is not yet clear if BTC has started a new growth phase or is still correcting..

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Bitcoin price marked peak highs above $ 11,100, but bounced off an important Fibonacci level and declines again.

Bouncing off resistance

On September 8, the bitcoin rate (BTC) marked a minimum, after which it began to grow. Yesterday, the price reached a high around $ 11,100, approaching the 0.618 Fib level of the correction of the entire bearish move and the former support area, which is now playing the role of resistance.

Technical indicators started to rise but have not yet confirmed a reversal. MACD and RSI are rising, but the latter is likely to face resistance around 50. In addition, the Stochastic Oscillator has started to rise, but has not yet formed a bullish crossover.

If the pair bounces back above the $ 11,200 level, it would be a compelling signal of an uptrend, especially if the aforementioned indicators acquire a bullish tone..

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Bitcoin breaks above $ 11,000 but bounces back

BTC chart. Source: TradingView

Bitcoin breaks above $ 11,000 but bounces back

Deviation

The short-term chart shows that the price is trading within a parallel upward channel. Generally, movements held within these parallel lines are corrective..

The high recorded yesterday became the price deviation above the resistance line of this channel. This jump was immediately followed by a decline back under the resistance line.

Technical indicators started giving bearish signals. 2-hour RSI warns of bearish divergence and MACD starts to decline.

The support line of this channel is now located in the area of ​​$ 10 600.

BTC chart. Source: TradingView

Price may retreat to two major support levels. If the whole move is not yet complete, a slight correction between the 0.5-0.618 Fib levels at $ 10 550- $ 10 660 can be expected. This almost coincides with the channel’s support, thereby confirming the insignificance of the correction, which should be followed by an increase.

If the entire move has already been completed, a deeper correction can be expected. In this case, the most likely level for a reversal will be the $ 10 312- $ 10 436 area.

If none of these levels cause a bounce, the price is likely to continue to decline.

BTC chart. Source: TradingView

Wave analysis

Two scenarios can be assumed at the moment:

Bitcoin breaks above $ 11,000 but bounces back
  • Price is still in wave 4,
  • The price completed the 5th wave and began a new bullish impulse move.

Until now, the first option was more likely. However, the wave has expanded too much. Although the possibility of wave 4 persistence is still possible (orange), the price is now testing all possible limits of how far wave 4 can go..

If this analysis is correct, price should form another lower low relative to the September 8 low.

BTC chart. Source: TradingView

An alternative scenario suggests that on September 8, Bitcoin has completed its decline phase and has now begun a new bullish impulse move.

However, both options indicate the inevitability of a correction, which is confirmed by short-term technical indicators. Will the price be able to bounce around $ 10 300- $ 10 550? This will be an indication for us whether we are now seeing a correction or the beginning of a new growth phase..

BTC chart. Source: TradingView

Thus, the bitcoin rate is showing short-term weakening and may correct in the $ 10,300- $ 10,550 area. The price behavior at these levels will help us determine what we are dealing with. Bitcoin will either reach a new low or confirm the start of a new upward movement.

You can read the previous Bitcoin analysis here.

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