Bitcoin found its way above $10,000 on Thursday after it dropped close to the support zone the day before. It seems BTC is close to a breakout. Which direction is more likely?
September 20, 2019 | AtoZ Markets - Since it made its 2019 bottom at $9,100 on July 17, Bitcoin has tried four times to come close and knock off this support level. However, the bullish counter-force has been strong enough to push back. Bitcoin has now remained in a clear triangle pattern. One thing is very clear - a breakout is very close. However, the direction of breakout is debatable.
Bitcoin is currently at $10,250, just about the price it started this week. The flagship cryptocurrency dropped to $9,650 on Wednesday and almost hit a new September low. However, a push close to $10,500 ensures it remains in the triangle for more days or hours. The entire market has gained over $10 billion this week after the Altcoins' surges on Tuesday and Wednesday.
Bitcoin analysis: important price levels
Resistance levels: $11,000, $12,300, $13,100 and $13,900 remain the critical resistance levels before the $19,800 all-time high. A new resistance level could hold at $10,500. The bulls would have to push above $12,300 to resume the 2019 bullish trend.
Support Levels: 9,600, 9,800, $9,300, $9,100 and $7,200. If the higher levels continue to hold, the BTC price will eventually break below the $9,300-9,100 support zone and push further toward the $7,200-7,000 bearish target zone.
Bitcoin price prediction: Elliott wave analysis
From a technical perspective, a triangle pattern is emerging. In the last update, we looked at the minor swings in-between. Depending on how you look at it, there are two most likely scenarios supporting breakout on either side.
It's very clear that the price is unfolding into a corrective structure since it dropped from $13,900 in late June. The depth of the correction is the one thing that is currently debatable. As this scenario shows with the chart below, the correction might go as deep as $7,000 before returning upside.
Price is making the same structure as the 2018 bearish trend. If you could remember, BTC slumped in late December 2017 and January 2018 from $19,800 to $6,000 and then went sideways to complete a10-months old triangle pattern.
Price eventually broke below $6,000 in November and continued with nearly 50% slump to $3,100 before the 2019 bullish trend set in. The second charts above shows the decline from 13,900 looks shallow - below the 50% Fibonacci retracement. Bitcoin will most probably drop deep into the January-November 2018 triangle pattern, around 7,200 or even the 6,000 neckline. The first chart shows a double zigzag pattern emerging with a triangle pattern as wave X. Once BTC breaks below the $9,100 neckline, we should expect more decline. Afterwards, a new bullish phase should push far above $19,800.
There is also the possibility of a simple triangle pattern emerging between $13,900 and $9,100 as the chart below shows.
A simple breakout above $11,000 could happen however might not be enough as the triangle still has the capacity to widen its area. A break above $12,300 should be enough to support this scenario. However, this scenario does not fit the long term picture as much as the first and therefore looks less likely.