Bitcoin has fallen to $ 11,000 after facing psychological resistance and may return to levels below $ 10,000 in the next 24 hours.
According to Quincy Dask, the king of digital currencies hit $ 10,956 this morning at $ 10,956 in the positive trend that began in the past five days. Bitcoin was expected to rise to $ 11000 after the uptrend channel and high volume traded on the one-hour chart yesterday.
At the time of writing, bitcoin was trading at around $ 10,602 on bitstream exchanges, down about 1 percent from the last 24 hours.
The recent uptrend, which comes from the announcement of the timing of the start of the futures contract, has kept investors looking forward to the bitcoin uptrend in the long run.
But in the short term, given the recurring pattern in the chart, the risk of bitcoin falling below $ 10,000 remains.
BTC has created a rising wedge pattern on the 4-hour chart, comprising converging trendlines connecting higher highs and higher lows.
The converging nature of the trendlines represents weakening bullish momentum. Hence, a breakdown is said to confirm a bullish-to-bearish trend change.
As of writing, the lower edge of the rising wedge is seen at $10,494. A 4-hour close below that level would confirm a rising wedge breakdown – that is, the bounce from $9,467 has topped out near $11,000 and the bears have regained control.
A wedge breakdown, if confirmed, would open the doors to $9,974 (horizontal support line). A violation there would expose the Aug. 15 low of $9,467.
The odds of BTC confirming a wedge breakdown in the next few hours is high, as the relative strength index has dived out an ascending trendline in favor of the bears. Further, trading volumes dropped during the recovery from $9,467, which usually happens during temporary corrective rallies.
The 5-week moving average (MA) has crossed below the 10-week MA, confirming the first bearish crossover since February.
The moving average convergence divergence (MACD) histogram continues to produce lower highs and is currently reporting the weakest bullish momentum in six months. The 14-week relative strength index (RSI) has also produced a bearish lower high.
BTC fell 10.49 percent last week, strengthening the case for a deeper pullback put forward by the rejection above $12,000 two weeks ago.
All-in-all, BTC risks falling below $10,000 in the next 24 hours or so. The bearish case would be invalidated if prices print a 4-hour close above $11,000 on the back of high volumes.
That would signal a continuation of the recovery from the Aug. 15 low of $9,467 and allow a rise to $11,589 (resistance on the 4-hour chart).
Disclosure: The author holds no cryptocurrency assets at the time of writing.
Bitcoin image via Shutterstock; charts by Trading View