Bitcoin Cranks Back Above $10,000 With a Vengeance

During the week of July 20-27, the Bitcoin (BTC) price increased considerably, reaching a high of $10,170 and further solidifying its bullish trend.

However, the price is currently trading inside a long-term resistance area, and a short-term pullback would be expected.

Weekly Bitcoin Outlook

During the week of July 20-27, the Bitcoin price created a bullish engulfing candlestick, reaching a high of $10,111 and a close only slightly below $10,000.

Currently, the price is very close to the $10,300 resistance area, which has been in place since September 2019. A breakout and close above this level could trigger a very rapid upward move. However, the price has been rejected each time it has reached this area, creating some type of bearish candlestick.

The current upward trend has been in place since March 12. Indicators show that while the price is still in an upward trend, the trend is losing strength. This is visible by the lower volume during the increase and MACD reading, which has been decreasing since June. However, the latter seems to have broken a bearish momentum trend, so there are mixed signals.

BTC Weekly
BTC Chart By Tradingview

Strength of the Trend

The daily chart shows that the price has almost reached the June 1 high of $10,373. This would be a very likely reversal area if the price increases, possibly creating a double-top.

Technical indicators show that the trend is still strong. Volume was high yesterday, the MACD is increasing, and the RSI is not yet overbought, nor has it generated any type of bearish divergence.

Therefore, while the price is overextended, there are no clear reversal signs yet.

Bitcoin Daily Time-frame
BTC Chart By Tradingview

However, the hourly chart shows several reversal signs.

There is decreasing volume during the recent highs, the RSI has generated a bearish divergence, and the MACD has begun to lose steam.

Furthermore, the price has created a harami pattern, which, when coming after an upward move can be read as a reversal sign. Thus, while the trend is clearly bullish, a short-term pullback would be expected.

BTC Bearish Divergence
BTC Chart By Tradingview

Wave Count

Beginning on July 6, BTC seemingly began a five-wave Elliott formation. Currently, it has just finished the third wave, which has become extended, or is very close to doing so.

We can also outline the sub-wave count for wave 3 (in green below). In it, the fifth wave has become extended. A common level for an extended fifth wave would be the 1.618 Fib of waves 1-3. This would give us a high of $10,440, only slightly above the June 1 high.

It is important to note that on June 1, the price first created a harami pattern, and followed that up by creating an evening star, a bearish candlestick pattern created by three candlesticks. This is a strong reversal sign, and its highs are expected to act as resistance in the future.

While we cannot determine reversal levels until the price actually reaches a high, a likely place for the impending wave 4 to end would be at the top of the previous channel at $9,800, or at its middle around $9,650.

A decrease below $9,450 would likely invalidate the wave count.

Bitcoin Wave Count
BTC Chart By Tradingview

The shorter-term wave count indeed suggests that we are nearing the end of the move.

It is possible that the price will create another pump and reach the previous target of $10,440, but it does not seem likely that it will go much higher than that this time around.

BTC Wave Count
BTC Chart By Tradingview

To conclude, while BTC is clearly in a bullish trend, it has reached a long-term resistance area. A short-term retracement is expected.

 

Join Geezgo for free. Use Geezgo’s end-to-end encrypted Chat with your Closenets (friends, relatives, colleague etc) in personalized ways.>>
Did you enjoy this post? Please comment below:

  • Bitcoin
  • Ethereum
  • Litecoin
  • Zcash
Scan to Donate Bitcoin to bc1qcc3xajxvdqjnx2f7j7sfcfun7jagr0nh94fa2e

Donate Bitcoin to this address

Scan the QR code or copy the address below into your wallet to send some Bitcoin

Scan to Donate Ethereum to 0x704671D7591d05Dd0790E86Aee964558E9347b07

Donate Ethereum to this address

Scan the QR code or copy the address below into your wallet to send some Ethereum

Scan to Donate Litecoin to ltc1q7tj9ydra9ylkelu42vypp6cu2v0msf5lc2p5mq

Donate Litecoin to this address

Scan the QR code or copy the address below into your wallet to send some Litecoin

Scan to Donate Zcash to t1LiPaQ7gsSL23FbjXswpSoguP6yAE1xj5B

Donate Zcash to this address

Scan the QR code or copy the address below into your wallet to send some Zcash

 154 

You may also like...

Leave a Reply

Your email address will not be published. Required fields are marked *