Shortly after topping out at $10,938, Bitcoin sharply reversed course and traders were left to speculate whether Federal Reserve Chairman Jerome Powell’s Bitcoin comments put a damper of the bullish price action. Or perhaps the advent of Bakkt’s (physically delivered) Bitcoin futures contracts was repeating the CBOE/CME Bitcoin futures product that launched to much hype right at the peak of the 2017 monster rally. Let’s take a look at the current price action and see if we can determine what Bitcoin is up to.
The recent move from $9,350 to $10,800 brought Bitcoin price above the 50-day MA. Previously, it was pinned between the 50 (black) and 100 (orange) day MA. As BTC made a strong run at $11,000, a spike in bear volume crushed BTC but buyers stepped in and absorbed the dump. BTC is maintaining the range it’s been in for the last week abd $10,500 now acts as resistance whereas previously it functioned as a support.
As mentioned previously, if Bitcoin price could set a higher high near $11,450 it would not only be encouraging, but would also bring the digital asset above the descending trendline of the wedge pattern. Furthermore, there appears to be a massive inverse head and shoulders (IH&S) pattern in play that originates from Aug. 12.
The Volume Profile Visible Range (VPVR) shows relatively stout purchasing demand around $9,500 and this begins to fizzle out near $9,300, which is below the base of the wedge pattern and the bottom Bollinger Band arm. As a matter of last resort, $9,200-$9,100 would be the last support before an uptick in buying demand presents itself near $8,500.