Bitcoin

Bitcoin Prices Risks Fall to Support Levels Below $10,000

September 9, 2019 at 11:04 PM | By Jit Sutradhar Feature

Points of view

  • Bitcoin risks falling below $ 10,000 this week, having confirmed a high volume bearish reversal on the daily chart on Friday.
  • A break below $ 10,000 would expose the key support levels aligned at $ 9,755 and $ 9,320.
  • The bearish case would weaken if the cryptocurrency exceeds $ 10,350 today, confirming a wedge break in the hourly chart.
  • A UTC close above $ 10,956 (maximum of August 20 based on Bitstamp data) is needed to revive the bullish outlook.

Bitcoin (BTC) is losing altitude and can slide further towards $ 9,750 this week unless prices invalidate a bearish technical configuration with a move above $ 10,350 in the next few hours.

The top cryptocurrency fell to $ 10,060 at 08:10 UTC, the lowest level since September 2, according to Bitstamp data.

BTC reached the minimum of one week two days after facing a strong rejection near the key resistance. On Friday, the cryptocurrency dropped sharply to $ 10,200 with strong volumes shortly after facing a rejection close to $ 10,956, a bearish bearish high created on August 20.

The fall of Friday marked a victory for the bears in a tug of war in progress with the bulls represented by the candle of the “spin” Wednesday.

Essentially, the market became bearish with Friday’s decline and the negative follow-up seen today has further strengthened the case to retest key support levels aligned below $ 10,000.

Even so, sellers should exercise caution, since the pullback from highs near $ 10,956 has taken the form of an upside reversal in intraday charts.

At the time of writing, BTC is changing hands to $ 10,240 in Bitstamp, which represents a 3 percent drop 24 hours a day.

Daily charts and hourly charts

BTC-daily-and-hourly

BTC fell 4 percent on Friday (top left), involving the price action seen in the last three days.

More importantly, prices closed (UTC) well below $ 10,378 on Friday, validating the seller’s depletion indicated by Wednesday’s spinning candle and Thursday’s doji candle.

In the next two days, prices traded in the range of $ 10,200 to $ 10,400 before falling to lows below $ 10,100 today, marking a continuation of Friday’s mass sale.

Now, the path of least resistance is down, according to the daily chart. Prices could soon defy support at $ 9,755, the minimum of the doji candle on August 22. A violation there would expose the recent minimum of $ 9,320 (August 29 minimum).

However, the bearish case would weaken if prices break up due to the falling wedge pattern shown in the hourly chart (top right). At the time of writing, the top edge of the falling wedge is at $ 10,350.

A descending wedge comprises converging trend lines that connect the lowest highs and lows. The convergent nature of the trend lines indicates that the bearish momentum is running out. Therefore, a breakout is widely taken as a sign of bullish reversal.

However, in this case, breaking the wedge, if confirmed, would only weaken the prospects of a fall below $ 10,000. The outlook would be bullish only if prices print a UTC close above $ 10,956 (high of August 20).

That would invalidate the bearish configuration of the lowest highs on the daily chart. Note that longer time frame charts have priority over hourly charts and other intraday charts, according to the theory of technical analysis.

Disclosure: the author has no cryptocurrency assets at the time of writing.

Bitcoin image via Shutterstock; charts by Trading View

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