Even though Bitcoin has a high probability of a continued decline, multiple indicators show that it there’s also an opportunity for a bullish impulse up to $9,800.
Bitcoin recently broke out of a three months long consolidation period that began on June 26 when it peaked at nearly $14,000. The result was a 19 percent drop that took it to hit a low of $7,730 on Sept. 30.
Based on the 1-week chart, the downward momentum allowed Bitcoin to test the 100-week moving average that is currently acting as a major support point. A move below this moving average could signal a further decline to the 150 or the 200-week moving average, which are sitting at $6,000 and $4,650, respectively. Nonetheless, it seems like the 100-week moving average could have the potential to continue holding the price of Bitcoin as it did it in previous bull markets.
Under the same time frame, the Bollinger bands assert that the recent correction was needed for BTC to test the lower band. Now, the pioneer cryptocurrency could soon bounce off to the middle Bollinger band (21-week moving average).
It is worth noting that the Bollinger bands also seem to have begun squeezing on BTC’s 1-week chart. This is indicative of a new consolidation phase between the lower and upper band, $7,700 and $12,000, respectively. Squeezes are usually followed by periods of high volatility. The longer the squeeze the higher the probability of a strong breakout. Thus, this $4,300 trading range is a reasonable no-trade zone per this indicator on the weekly chart.
A break above $12,000 could lead to a significant upswing that takes Bitcoin into new yearly highs. Meanwhile, a move below $7,700 could signal a further retracement.
After Ali began forex trading in 2012 In 2014, he came across Bitcoin’s whitepaper and was so fascinated by the idea of a decentralized, borderless, and censorship-resistant currency that he started buying Bitcoin. By 2015, he started traveling to spread the word about Bitcoin.
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