The Bitcoin (BTC) price is approaching a decisive daily and weekly close, which will be essential in determining the direction of the next move.
Bitcoin’s Candlestick Outlook
On Aug. 25, the bitcoin price created a bearish engulfing candlestick that took the price to a low of $11,112. However, BTC created a long lower wick and bounced from the $11,200 support area. The price has been retracing upwards since.
However, BTC has failed to reach a close above the midpoint of the body of the aforementioned bearish engulfing candlestick. This allows for the possibility that the upward movement is corrective and BTC will resume its downward movement afterwards.
While the price has increased considerably above the level today, there area still 17 hours left until the daily close, as of the time of publication. This close is extremely important, since a close above $11,540 would go a long way in indicating that the price has begun a new upward movement and has completed its correction.
The weekly chart reveals a very similar outlook. After an almost parabolic increase, the price created a shooting star candlestick last week (Aug. 17-24) and decreased slightly the next week (Aug. 24-Sept. 1).
As mentioned earlier, a daily close above $11,540 would also mean a weekly close above this level. This is crucial, since it was the same level that created the numerous long upper wicks throughout June-July 2019 before an extended downward movement. A close below this level could mean that the upward move has ended and the price will correct towards $10,000.
On the other hand, a close above this level in both the daily and the weekly time-frames would be a strong sign of continuation.
Technical Indicators Are Undecided
Technical indicators are also undecided, further solidifying the importance of the daily close. The daily MACD has been increasing, possibly creating its third higher momentum bar today. However, Aug. 29 was a bearish candlestick, so no bullish reversal sign has been given. A bullish daily close today (Aug. 30) would do that. However the long-term MACD is still bearish.
The stochastic RSI is falling and shows no signs of an upcoming bullish cross yet. However, it is in overbought territory, indicating that the price might be reaching a bottom.
The weekly chart shows a very pronounced bearish divergence in the RSI relative to the aforementioned July 2019 highs. This is a sign that suggests the price might be close to a top. The stochastic RSI is in overbought territory and could possibly generate a bearish cross with a slight decrease. A bearish weekly close today would also give a bearish reversal sign in the MACD.
Therefore, while the daily readings could initiate a reversal, unless they do so quickly, the weekly readings remain bearish.
To conclude, a bearish close on Aug. 30 would give a bearish reversal sign in the weekly time-frame of the MACD and would solidify the bearish divergence in the same time-frame of the RSI. Also, it would be a close back below the long-term range, signifying that the price might decrease all the way to $9,900.
On the other hand, a bullish close would give a bullish reversal sign in the daily MACD and negate the majority of the resistance from the Aug. 21 bearish engulfing candlestick. A daily close above $11,640 would give a continuation pattern in the weekly time-frame, creating a bullish doji above the previous resistance.
$11,540 is the key level to watch, while a daily close above $11,640 would almost remove all doubt that the price is going higher.
For our previous Bitcoin analysis, click here!
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Source: Be In Crypto