The bitcoin (BTC) rate broke through important resistance, which neutralized a number of bearish signals. Now the likelihood of a new wave of growth has significantly increased, which can send prices to fresh highs of the current year.
Bitcoin monthly close
In August, Bitcoin formed a small bullish Doji candlestick that appeared after the bullish engulfing candlestick pattern. This is a positive signal for the main cryptocurrency, but quotes have yet to break the highs of the candle wicks formed in July 2019. The RSI also provides significant bearish divergence signals.
At the same time, MACD and stochastic RSI are rising, but not in the overbought zone. In other words, monthly charts paint an ambiguous technical picture.
On the daily charts, it can be seen that Bitcoin recently exceeded the resistance of the August 25 bearish engulfing candle. This is a bullish signal indicating the prospects for further growth towards the next barrier in the $12,300 region.
Immediate support is now at $11,300.
Technical indicators point to a favorable picture. The MACD is giving signals for a bullish reversal, and the stochastic RSI is preparing for a bullish crossover, rising from the oversold zone.
The RSI, meanwhile, has bounced off the 50 level and is heading north.
Short term weakening
If we consider the dynamics of Bitcoin in the framework of wave analysis, then now the coin is at the stage of the fifth wave after the recent completion of the fourth.
Wave 4 showed an unconventional correction in which wave B broke through the top of wave A, while wave C did not break the lows of wave A.
Analyzing the extent of waves 1-3, we can assume that the fifth wave will end either at $13,100 or at $14,169, where the 0.618% Fibonacci retracement level with respect to waves 1-3 passes. If the fifth wave is extended, the price may rise even higher.
In the shorter term, quotes are also within the five-wave structure, where the third sub-wave looks extended within the fifth wave.
If it falls below the low of the fourth wave of $11,117, this wave analysis will lose its relevance.
So, Bitcoin has probably started a new wave of growth, which can send quotes into the $13,000- $14,000 zone.