The Bitcoin price broke out from a descending wedge. The breakout was swift and done with significant volume. Currently, it is trading slightly above the previous breakdown level, right at the 100-day moving average (MA). In the short-term, it has created a bearish double top pattern.
Bitcoin Price Highlights
- The Bitcoin price broke out from a descending wedge.
- There is resistance at $9600 and $10,800.
- The 100-day MA is offering resistance.
- The price has made a short-term double top.
- There is bearish divergence in the RSI.
Previous Breakdown Level
The Bitcoin price began a very rapid upward move on October 25, once it reached the $7400 minor support area. Within 16 hours, the price reached a high of $10,480. However, it has been decreasing since.
While it reached a close above the $9400 resistance area, it did so only incrementally and has created several long upper wicks.
When looking at the moving averages (MAs), the bearish sentiment is evident.
The Bitcoin price has failed to reach a close above the 100-day MA for three days in a row now — creating very long upper wicks each time.
Additionally, the price was trading inside a symmetrical triangle throughout July/September. The current upward move has validated the support line of that triangle.
This is an extremely bearish development since it suggests that BTC will resume its downward movement and the increase was only a response to the prior breakdown.
In the short-term, the Bitcoin price has just made a double top, which is a bearish pattern. Furthermore, it is combined with a bearish divergence in the RSI.
The non-existent volume during the second top makes us believe that a decrease is in store.
It would be customary for the price to decrease at least to the 0.5 Fibonacci level of the move — reaching $8700.
Good luck and happy trading! For yesterday’s analysis click here.
Disclaimer: This article is not trading advice and should not be construed as such. Always consult a trained financial professional before investing in cryptocurrencies, as the market is particularly volatile.
Images courtesy of Twitter, TradingView.
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