- The technical picture is still bearish with Bitcoin primed for further declines.
- As the price grinds closer to the falling wedge pattern breakout, we could see a reversal towards $12,000.
The crypto market is extremely volatile this week. The correction from June’s highs has culminated in declines under $10,000. Bitcoin has formed new weekly support at $9,733 giving way for bulls to push for correction above $10,000. In spite of the reversal, recovery has been very shallow with BTC/USD unable to clear the resistance at $10,200.
The 1-hour chart shows Bitcoin trading at $9,938 as the market stabilizes following the violent rollercoaster ride. The path of least resistance appears to be sideways, therefore, I expect Bitcoin to remain pivotal at $10,000.
BTC/USD 1-h chart
The technical picture is still bearish with Bitcoin primed for further declines. It is essential that buyers sustain Bitcoin above $9,900 to avoid retesting the support at $9,733. The Relative Strength Index (RSI) 1-h is stuck under the average since Sunday last week. This shows that the bearish effect is far from over. The gradual slope in the indicators suggests that sellers are gaining both traction and confidence they push Bitcoin towards $9,000.
The Moving Average Convergence Divergence (MACD) has also not been able to correct above the mean line into the positive region. At the moment, the indicator is moving horizontally at -165. However, there are signs of upward divergence increasing to show the buyers have the capacity to defend the support at $9,733.
Moreover, as the price grinds closer to the falling wedge pattern breakout, we could see a reversal towards $12,000. A falling wedge pattern signals a trend reversal, especially when occurring in a downtrend. Resistance will be encountered at $11,000 and at the 100 Simple Moving Average (SMA). Once $12,000 hurdle is cleared, Bitcoin could retrace the steps above $13,000.