Bitcoin (BTC) Analysis: $10,700 in sight for this weekend

The turmoil surrounding the major Bitmex exchange has caused some volatility in recent days, but bitcoin remains in a daily balancing pattern. Will it break out at $9,600 or towards $12,000?

Bitcoin rate weekly chart

On the weekly chart (figure 1) you can see that despite last week’s bullish hammer candlestick we are dropping this week. It is also clear that $11,150 is being rejected and is the main resistance to the bulls. As long as the price remains below this we can expect more bearish action.

What is Bitcoin Era going to do?

Support is in the 21EMA/golden pocket region at $10,100 – $10,200. If this is broken there is a good chance that the price will go back to the last bottom at $9,800.

If it loses as support a lower low is created and a weekly downtrend occurs. Next targets are the 50MA at $9.000 and the $8.800 support.

On the MACD you can also see that the blue line has crossed the red line downwards (white arrow) and that is bearish. The weekly cross does not happen often, but when it happens it continues. I will discuss this in more detail in a video analysis of this week.

In the bullish scenario, the bulls have to break the $11,150 and $11,500 and make support. A first step would be to close at the weekly above $10,500. As long as that doesn’t happen, I will remain bearish.

However, the volume is lower than average and decreasing. This is also reflected in a pattern that forms on the daily chart I discuss below.
Figure 1: The $11,150 bearish has been re-tested and the MACD has been bearishly crossed.
Bitcoin price daily chart

The daily chart (Figure 2) shows that the price has reached the target of the head and shoulders and then was rejected from the $11,150 neckline in a bearish re-test. The price then ended up in an equilibrium pattern on which you can draw a (yellow) triangle.

An outbreak from this will determine the further trend. The price can still see a small rise up to test the top of the triangle again before a side is chosen.

Bullish scenario

Short and powerful: to stay bullish, the bulls have to break out the triangle upwards and make support. To stay truly bullish, we need to make the $12,000 support.

Bearish scenario

In the bearish scenario, support is lost around $10,300 – $10,400 and the triangle breaks down. Targets are $9,800 and $9,500 – $9,600 and the bottom of the green rectangle is at $8,800. At $9,600 there is also a futures gap open.
Figure 2: The price is in an equilibrium pattern.
Bitcoin price 4 hour chart

On the 4 o’clock graph (figure 3) the bears have the upper hand. The price moves below the 200MA and the 12/26EMA. There is also a potential rising wedge forming a bearish pattern.

There is also a potential rising wedge forming a bearish pattern. The price is again below $10,600 which was the support before. Support is at $10,400. I see the price moving sideways again this weekend to get more volatility on Monday as the traditional markets open.

The rising wedge may still break out downwards but find support at the $10,400. If $10,400 breaks then there is a chance that the daily balance pattern will break out downwards.

If the bearish rising wedge does not play out and the $10,600 is broken the price could reach the top of the daily balance pattern again around $10,700 – $10,800.

The price levels to monitor are at least $10,400 and $10,600.
Figure 3: There is a potential rising wedge on the 4 o’clock.

I have been bearish for a number of weeks and that will only change a little when the price can rise above $11,150 again.

The balance pattern that now forms on the daily chart can break out either way, but I tend to be more bearish because of the correlation there is with traditional markets and the weekly bearish crossing of the MACD.

The traditional markets are discussed in the video analyses on YouTube.