Bitcoin (BTC) declined sharply on 13 September, raising some doubts about the legitimacy of the previous uptrend.
BTC rose to a high of $22,799 and briefly broke above the 0.618 Fibonacci retracement resistance level of the entire previous downward movement (red icon). Highers also appear to be causing the support line of the previous ascending parallel channel to retest.
However, the price failed to maintain its upward momentum and declined sharply on the same day, forming a massive bearish candlestick leading to a low of $19,860. The rejection validated both the 0.618 Fibonacci Retracement resistance level and the previous support line as resistance.
If the decline continues, the nearest support area will be $19,000.
wave count analysis
The increase since September 7 clearly looks like a five-wave upward movement. So, it makes sense that the upcoming reduction is part of the ABC corrective structure. However, the fact that the downside was extremely bullish, immediately reaching the 0.618 Fibonacci retracement support level (black) cast some doubt on this possibility.
Since there are still many possible long-term wave counts, it is safe to say that wave counts are still unclear.
Nevertheless, the move is most likely expected towards the 0.5-0.618 Fibonacci Retracement resistance level (White) before another decline. The above resistance lies at $21,300 to $21,660.
BTC dominance rate
An interesting development during yesterday’s drop is the sharp decrease in the Bitcoin dominance rate (BTCD) during the BTC price decline. However, despite this downside, BTCD broke a descending resistance line and moved above the daily RSI 50 (green icon).
Both of these are considered to be bullish signals. Therefore, they support an upward move towards the 0.5 Fibonacci Retracement resistance level at 43.70%.
The weekly chart supports this possibility, as it shows that BTCD is trading inside the long term support at 40.50% and has formed a bullish candlestick on the weekly time frame. Moreover, the weekly RSI has produced a significant bullish divergence, aligning with the readings on the daily time frame.
be for[in]Previous Bitcoin (BTC) Analysis of Crypto, Click Here