Bitcoin (BTC) has been rejected by the $11,000 level multiple times in the past few weeks but has managed to avoid getting stuck under $10,000.
It is possible that BTC could drop back slightly to $10,550 before resuming its upward movement.
Bitcoin Approaches Resistance
Bitcoin has been increasing since Sept 23, when the price reached a local low of $10,138. The increase continued until the price was rejected by the 0.786 Fib level of the previous decrease at $10,959.
However, the decrease as a result of the rejection has been weak, with the price only getting knocked back to $10,683.
The primary support area is found at $10,550 while the main resistance areas are found at $10,950 and $11,200.
The 2-hour chart shows that the price is following an ascending support line, a breakdown below which could take the price to the previously mentioned $10,550 support area.
On the other hand, BTC is possibly following a descending resistance line (dashed), a breakout above which could take the price towards the $11,200 resistance area.
Technical indicators are relatively neutral, so whichever line breaks first will likely determine the direction of the next movement.
The wave count for BTC suggests that the price initiated a bullish impulse on Sept 23 (in blue below), and completed the first wave on Sept 26. The sub-wave count is shown in red.
If the count is correct, the price is in the process of completing a W-X-Y correction, which is expected to end near $10,550.
Besides being a support area, it’s also the 0.5 Fib level of the entire increase, as well as a projection of the sub-wave W length to the top of X. The confluence of important levels makes it the most likely area for the correction to end.
If the price increases instead, the first target to the upside is found at $11,200.
To conclude, while it is likely that BTC has begun an upward move, a short-term correction towards $10,550 is likely before the price resumes any bullish movement.
For BeInCrypto’s previous Bitcoin analysis, click here!