On Oct 22, Bitcoin (BTC) continued its ascent by creating a massive bullish engulfing candlestick and breaking out above the $12,050 resistance area.
While short-term retracements could occur, it is likely that Bitcoin’s trend is still bullish.
Bitcoin Breaks September Highs
On Oct 22, Bitcoin continued its ascent by creating another bullish engulfing candlestick which smashed through the previous $12,050 resistance area. The price reached a high of $13,235 before decreasing slightly to the current price of $12,800.
If BTC begins to decrease, the $12,050 area is expected to act as support.
However, technical indicators do not show any weakness. The RSI, MACD, and Stochastic Oscillator are increasing without generating any bearish divergence.
The weekly chart shows that the price might have broken out from a descending resistance line, however, it has yet to reach a close above this area.
If BTC is successful in doing so, the next resistance levels would be found at $14,000 (wick high from June 2019), $16,400, then $19,500.
Short-Term Movement
The shorter-term two-hour chart shows that the price has created a shooting star candlestick, which is normally considered a bearish reversal signal.
However, besides the shooting star, there are no other signs of weakness. While the RSI is overbought, it has not generated any bearish divergence. On a similar note, while the MACD has begun to decrease, it has not generated a bearish reversal signal.
Therefore, while the BTC price could retrace in the short-term, there are no signs that it’s at the end of its bullish trend.
Wave Count
It is likely that Bitcoin began a bullish impulse (shown in orange below) on Sept 8 and is currently in the third wave. The most likely level for the wave to end would be the 3.61 Fib extension of wave 1, which falls at $14.360.
Inside the third wave, the price looks to be nearing the top of or has already completed the third sub-wave (blue), which extended all the way to the 3.61 Fib extension of sub-wave 1.
Furthermore, since waves 2 and 4 have to alternate, the deep correction of wave 2 indicates that wave 4 is likely to be shallow. It will likely end near $12,125, which is the 0.382 Fib level of sub-wave 3 and near to a minor support area.
Afterward, BTC would be expected to resume its upward movement.
The shorter-term chart shows the completed minor sub-waves of sub-wave 3 (shown in red and green) which as well as an extended sub-wave 5.
To conclude, it’s likely that BTC is in a bullish impulse and will continue moving higher. Short-term retracements towards $12,100 could occur in the meantime.
For BeInCrypto’s previous Bitcoin analysis, click here!
Disclaimer: Cryptocurrency trading carries a high level of risk and may not be suitable for all investors. The views expressed in this article do not reflect those of BeInCrypto.
