Bitcoin’s price created a bullish Japanese recovery candlestick on September 24.
There is support at $ 10,200, and resistance at $ 10,800.
The price could have started a bullish impulse
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On September 24, Bitcoin Supreme price created its first higher low since the September 4 fall, along with a bullish Japanese recovery candlestick. It is possible that this is the start of a new upward movement for BTC.
Japanese bullish recovery candlestick
On September 25, Bitcoin’s price created a bullish Japanese recovery candlestick, rising from a low at $ 10,193 to a high of $ 10,795. It also created its first upper low since the fall on September 4.
Despite this rise, technical indicators have not yet confirmed the upward trend. The MACD is on the rise, but it has not yet moved into positive territory and the RSI is below 50.
Moreover, the Stochastic Oscillator should also form a bullish cross which would go a long way in confirming the uptrend
The shorter-term, six-hour chart also suggests that the uptrend is not yet confirmed. The rise only reached the 0.618 fibonacci level of the previous downward movement, $ 10,783, just below the $ 10,800 area. This area first served as support and should now offer resistance. It is therefore possible that the move is a retracement in response to the earlier decline. In this case, the closest support is at $ 10,200.
Technical indicators are turning bullish. The MACD is up and the RSI is above 50. That said, the MACD has not yet entered positive territory.
The rise in the two-hour chart shows that this could be the start of an upward movement. The price has broken through a descending resistance line, the MACD is positive and the RSI is rising without generating a bearish divergence.
The two most plausible options are:
A move above the $ 10,800 zone and its validation as support, before the price continues to rise (in green below);
a decline towards $ 10,400 before a rise towards $ 10,800 (in red).
At the time of writing, the second option seemed the most likely.
If the $ 10,400 area fails to support price, it would greatly reduce the chances of it being an upward move. Likewise, a decline below the low of $ 10,138 would confirm that this is not the case.
The recent move in BTC, particularly the September 25 rally, increases the possibility that the price started a bullish impulse (in orange below) on September 9.
In this case, price has completed a first wave then its correction (in red), and has now started wave 3. A decline below the September 23 low, at $ 10,136, would reject this wave count.
There is a possible bearish scenario where the earlier rise would be part of wave 4, while the September 25 rise would be the sub-wave 2 of a bearish impulse (in red below). That said, the correction was too short to be considered as such, and this count doesn’t mesh very well with the longer-term move. It is therefore unlikely that this is the correct account, unless the price drops below $ 10,136.
In conclusion, unless the price of BTC declines below $ 10,136, it is likely that it has started a bullish impulse.