Bitcoin’s spike of 8% on August 29 caused a bullish market sentiment and left many thinking that the price has finally started its upturn. This price spike was caused by the U.S. Court of Appeals for the D.C. Circuit ruling a reassessment of the SEC’s refusal of Grayscale’s Bitcoin ETF application.
However only two days after the U.S. Securities and Exchange Commission (SEC) announced postponed decisions on several spot Bitcoin exchange-traded fund (ETF) proposals, resulting in a price decline to the levels from which it came up.
Since the start of September Bitcoin’s price has been moving sideways around $26,000, but made another dip to just slightly below $25,000 on September 11. As it made a lower low and potentially entered the liquidity zone, we have seen a recovery of 6%, with the price currently being traded at $26,450.
Was the September 11 low the end of the decline from its July 14 high of $31,800? And if so, can we see a larger recovery? In order to make these assumptions, the price needs to pull back up above $27,000 first by the end of the day, and in this analysis, we are going to look into this possibly.
The price of Bitcoin reached its yearly high of $31,800 on July 14 which could have marked the competition of the the rise from November 21 when the price was $15,400. Looking at the daily chart below, we can see that the wave structure supports this assumption.
This was further confirmed by the descending price action which led the price to a breakout below the ascending support line and the price falling back to the same level from which it previously advanced for its July high.
It did so in an impulsive manner and whipped out all the gains previously made, and it indicated the start of a downtrend, which we have pointed out in our previous analysis. This is why we have been anticipating an upward move in September as the first corrective wave out of the larger downtrend, and with today’s increase looking bullish, it might just be it.
The September 11 low could have ended the decline as it dipped below into the liquidity zone. This is why we have seen some positive price action that is likely to continue pushing the price higher, but its room might be limited.
Even if this positive price action is part of the sideways structure, we are likely to see the price of Bitcoin above $27,000 by the end of the day.
As we are now expecting an ABC to the upside, its optimal target would be at $27,900, where the next significant resistance to the upside is. On the other hand, a more significant zone is located slightly above and measured with the Fibonacci extension tool, the 1.618 level is sitting right at the upper level of the zone above at $28,400.
The price of Bitcoin would be expected to continue moving to the upside to the $27,000 level and beyond. If this does occur by the end of the day, it will mean that the daily candle close was a higher one compared to the high of September 8, which will validate the uptrend.
Alternatively, if the momentum gets extinguished by a newcomer sellers’ pressure, the price could continue moving to the downside for another minor lower low, but we would still be expecting the same recovery to the $28,000 zone afterward.
Please note that the contents of this article are not financial or investing advice. The information provided in this article is the author’s opinion only and should not be considered as offering trading or investing recommendations. We do not make any warranties about the completeness, reliability and accuracy of this information. The cryptocurrency market suffers from high volatility and occasional arbitrary movements. Any investor, trader, or regular crypto users should research multiple viewpoints and be familiar with all local regulations before committing to an investment.