Bitcoin threatens a wave of decline after rising to resistance

Bitcoin threatens a wave of decline after rising to resistance



Bitcoin threatens a wave of decline after rising to resistance

  • Bitcoin hits 0.382% Fibonacci retracement from previous fall

  • Short-term technical indicators are giving bearish signals

  • BTC may have completed the fourth wave of an impulsive five-wave structure

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The bitcoin (BTC) rate has been strengthening with varying degrees of success since September 8 and has finally reached the first important Fibonacci resistance level, for which the cryptocurrency has yet to fight.

Perhaps the first cryptocurrency has already completed a bullish pullback or is close to its completion, and will soon resume its decline.

Bearish signals

The bitcoin rate reached a minimum on September 8 and has been growing since then. The rally is smooth and uneven, but on September 14, the rally accelerated noticeably, and as a result, the price formed a bullish engulfing candlestick pattern on the charts. Earlier at trading on Tuesday, BTC was noted at a maximum of $ 10,839, after which it corrected and returned to its original positions, trying to determine the vector of further movement.

Quotes have reached the level of 0.382% Fibonacci retracement at $ 10,681, while the 0.5% retracement level is in the region of $ 10,945.

Technical indicators paint a mixed picture. MACD is advancing as is the slope of the stochastic oscillator, but no bullish crossover has yet been seen.

At the same time, the RSI bounced off the 50 level and may start moving southward..

BTC Chart by TradingView

False breakout

The shorter-term charts show a predominantly negative picture. The price forms rising highs, but all three indicators in the form of MACD, stochastic oscillator and RSI give signals of bearish divergence, and in the first two cases these signals are especially pronounced.

All this points to the prospects for a decline in the BTC rate..

BTC Chart by TradingView

In addition, the price may have made a false breakout of the minor resistance of $ 10,700, which bitcoin was trying to catch at the time of writing the technical analysis and went into negative territory on the daily charts..

If BTC fails to hold above this level, the cryptocurrency risks returning to the $ 10,250 support area.

BTC Chart by TradingView

Wave analysis

In the technical analysis of September 11, we wrote that on September 2, Bitcoin probably began to form an impulsive bearish five-wave Elliott structure and is in the stage of wave 4, which is implemented in the form of a complex corrective structure W-X-Y.

Bitcoin threatens a wave of decline after rising to resistance

At the auction on September 15, the price touched a high of $ 10,831, while the ratio between waves W and Y was 1: 1.61 – the usual level for such corrections.

In addition, the 0.5% Fibonacci retracement level relative to the third wave (orange on the chart) is located at $ 10,951, just above the previously mentioned high..

BTC Chart by TradingView

Bitcoin threatens a wave of decline after rising to resistance

Closer analysis reveals a subwave A-B-C (blue) correction within wave Y, where the ratio between waves A and C is 1: 1, and this only increases the likelihood that a top has already been formed.

BTC Chart by TradingView

Based on the length of waves 1-3, it is possible to identify possible target levels of the bottom of the fifth wave – $ 9983 or $ 9473 * (under the standard scenario).

Loss of $ 9,450 level will jeopardize BTC’s longer-term positive outlook.

BTC Chart by TradingView

So, perhaps bitcoin has already completed its bullish pullback and is now heading towards the $ 9,700 level, and possibly $ 9,470..

The previous analysis of bitcoin can be read here.


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