Bitcoin price extends the bearish leg to areas marginally below $10,000 after numerous trials to sustain gains past $12,000.
Bitcoin price path of least resistance is now upwards following oversold conditions; support above $10,300 is essential.
The leading cryptocurrency gave in to the apparent selling pressure in the market. However, this time, the fall was nothing compared to what we have in in the last two months. From highs marginally above $12,000, Bitcoin initially found a pit stop at $11,100 (a popular support area in August). Recovery was immediate but the flagship cryptocurrency failed to break above $11,500.
The impact of a rising wedge pattern
Earlier this week, Coingape highlighted and discussed the formation of a falling wedge pattern. Wedge patterns are incorporated in technical analysis to signal a reversal from a prevalent trend. In this case, the rising wedge pattern hinted that an acute reversal was in Bitcoin’s path after after a lengthy uptrend. Sometimes these wedge patterns (whether rising or falling) are ignored and the asset goes ahead to trade at higher levels.
The freefall from the failed attempt to break above $11,500 was fueled by the fact that buyers were exhausted from the lack of sustained price action above $12,000 for almost a month despite their effort. In addition, trading a lower price sometimes helps new buyers to enter giving the asset (BTC) a formidable push upwards supported by volume.
The fall was so massive that expected supports at $11,000, $10,500 or even $10,200 succumbed to the intense pressure. Bitcoin took a sneak peek into the area below $10,000 before trading a monthly low of $9,995.
At the time of writing, BTC/USD has recovered to trade at $10,303. With the Relative Strength Index (RSI) close to the oversold, Bitcoin’s probable path is upwards from now henceforth. The RSI illustrates the strength of a trend. It also helps to highlight oversold and overbought conditions. At the moment, Bitcoin is trading near oversold conditions, a situation that calls for more buying entries, in this case, BTC is likely to pull upwards in a bid to recover the lost ground towards $11,000.
Luke has had a long interest in financial technology, especially cryptocurrency and blockchain. With a Bachelors degree in Journalism and Media, Luke is dedicating his writing skills for the digital currency sphere.He can be contacted at email@example.com