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.

When looking at the 3-day chart, a rebound to the middle Bollinger band seems quite likely. In fact, Bitcoin is currently trying to gain the 50 percent Fibonacci retracement level as support. Breaking above this Fibonacci retracement area with enough volume could trigger a bullish impulse that lets this cryptocurrency test the next level of resistance around the 38.2 percent Fibonacci retracement level. This is exactly where the middle Bollinger band on the weekly chart sits at.

In addition, the TD sequential indicator presented a buy signal in the form of an aggressive thirteen. This bullish signal estimates that BTC could rise for the next three to twelve days. Yet, BTC is currently on a red seven candlestick on a bearish countdown to nine. Therefore, a close above the 50 percent Fibonacci retracement level and a spike in volume could be used as confirmation that BTC will indeed rebound.

The likelihood that Bitcoin has to rise up to the middle Bollinger band or the 38.2 percent Fibonacci retracement level ($9,800) decrease when the technicals are based on its 1-day chart.

Under this time frame, BTC appears to have broken down the lower support of a descending triangle formation that had been developing since the peak at nearly $14,000 on June 26. This is considered a bearish pattern that forecasts a 31.5 percent price drop (determined by the height of the triangle) that could take Bitcoin to $6,500. Thus far, this crypto plummeted 19 percent from the breakdown point of the descending triangle, $9,500, to reach a low of $7,730.

On a different perspective, Bitcoin could actually be continuing its trajectory within a descending parallel channel on its daily chart. At the moment, this cryptocurrency appears to be testing the resistance given by the middle line of the channel. Breaking above this area will likely accelerate the buying pressure behind BTC, taking it to the top of the channel, which is also at $9,800. This is where the middle Bollinger band on the weekly chart and the 38.2 percent Fibonacci retracement level on the 3-day chart sit. Conversely, if the middle line of the channel is able to reject the price of Bitcoin, it could ignite a further correction to the bottom of the channel, around $7,000 or lower.

Even though Bitcoin’s trend is technically relying on its ability to break through or get rejected by the $8,500 resistance level, its market dominance shows less ambiguity.

Throughout the year, Bitcoin rose to levels of dominance not seen since 2017. The move was perceived by an ascending triangle formation on its 1-week chart forecasting a 38.7 percent upswing (determined by the height of the triangle) that could have taken BTC to reach an 80 percent market share. However, it seems like BTC dominance peaked at 73.4 percent and now it could be entering a corrective period as it recently moved below the 71.5 percent support level.

Due to the fact that assets that break out of ascending triangle patterns usually reverse to the breakout point, BTC could soon retrace to have a 60 percent market share.

The same scenario is given by the moving averages. Since BTC dominance moved below the 200-week moving average, it could be bound for a correction down to the 150-week moving average, which is also around 60 percent. All of these coincides with one of the most recent reports by Binance, that suggests that BTC dominance will go back to the 50–60 percent range.

“We still believe in this, partly because BTC dominance was below 60 percent for an extended period, from May 2017 until June 2019. It has only been in the past three months or so that BTC dominance has shot up so dramatically, and the crypto-world has found its way of making everyone feel like a prisoner of the moment. Short-term wise, though, BTC dominance may be sticking around,” reads the report.

Bitcoin is currently sitting at a pivotal point marked by the $8,500 resistance level. If this cryptocurrency is able to close above this resistance point, it could signal a bullish impulse that allows it to surge 15 percent to hit $9,800. On the other hand, if the selling pressure increases and the $8,500 resistance level rejects the price of BTC, it will likely continue declining to the next level or resistance around $7,000 and $6,500.

Due to the implications that the current price levels pose for Bitcoin’s trend, it will be wiser to wait for a clear break or rejection before entering any trade.

The post Bitcoin on the cusp of surging to $9,800 or dropping to $6,500 appeared first on CryptoSlate.

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