Since reaching a high of $13,764 on June 26, the Bitcoin price has been trading inside of a descending wedge. While the price movement was initially very volatile, that has not been the case recently. For the past 22 days, the price has traded inside a range of only 10 percent while hovering between $7800-$8700.
The Bitcoin price looks likely to continue consolidating until the end of the month, after which a breakout looks likely. The price has strong support all the way down to $7000, where it may possibly make a bottom.
Trading inside a range is otherwise known as consolidating. Bitcoin has been known to make these types of movement, especially after a rapid upward/downward move.
Full-time trader and technical analyst @cryptomichnl outlined the descending wedge the price is currently trading in along with several minor support and resistance areas.
Still sliding down.
Green zones are potential levels of support if it was up to me.
Generally expecting more ranging to come before decision of the market. pic.twitter.com/BuIX1UFWK0
— Crypto Michaël (@CryptoMichNL) October 16, 2019
Additionally, he outlined a possible price path — in which, after consolidating for the entire month of October, the price will break out. @cryptomichNL believes that, after the breakout, we will “crush the 9.3k resistance level.”
We also discussed the possibility of a November breakout here.
Let’s take a closer look at the price movement and determine if that is likely.
Since reached the aforementioned high of $13,764, the Bitcoin price has been on an extended correction.
Based on its price movement, we believe this is a 3-3-5 correction — which has transpired throughout two A-B-C waves (the 3-3- part of the correction) and is currently finishing its final downward move, which is transpiring in five waves.
It looks as if the Bitcoin price is in the fifth and final wave.
Judging by the chart, BTC should make a bottom around $7000, inside the minor support area that coincides with the descending support line. Afterward, the price is likely to break out.
If it does, the closest resistance area is found near $9500.
Furthermore, if the breakout occurs in November, the resistance area is likely to coincide with the 100-day moving average (white).
This is because the moving average is moving downward, and is likely to reach the resistance area until then.
Therefore, we agree with the hypothesis laid out by @cryptomichNL that the Bitcoin price is likely to consolidate until the end of the month.
However, we believe it will make a slightly lower low of $7000 before it eventually breaks out and heads for the aforementioned resistance areas.
Do you think Bitcoin will break out in November? If not, when? Drop your thoughts in the comments below.
Disclaimer: This article is not trading advice and should not be construed as such. Always consult a trained financial professional before investing in cryptocurrencies, as the market is particularly volatile.
Images are courtesy of Shutterstock, TradingView.