- Bitcoin’s drop from $10,949 to $9,855 (Wednesday low) may be a bear trap, as selling volumes have dropped throughout the price pullback.
- A widely-tracked 4-hour chart indicator is reporting a bullish divergence and the daily candlesticks are signaling seller exhaustion. BTC could rise above $10,270, confirming a falling wedge breakout on the 4-hour chart.
- A wedge breakout, if confirmed, would open the doors to $10,956 (Aug. 20 high). A UTC close above that level would confirm bull revival.
- On the lower side, a high-volume drop below $9,855 could pave way for a deeper drop toward $9,500. Currently, that looks unlikely.
Bitcoin (BTC) has recovered from nine-day lows hit earlier on Wednesday and may pick up a strong bid during the day ahead.
The leading cryptocurrency by market value fell to $9,855 on Bitstamp during the Asian trading hours, the lowest level since Sept. 2. At that level, prices were down 11 percent from Friday’s high of $10,950.
At time of writing, BTC is changing hands around $10,000, representing a 1.9 percent drop on a 24-hour basis.
BTC’s drop into four figures seen earlier today validated the bearish view put forward by BTC’s failed breakout on the hourly chart on Monday.
Further, the daily chart is reporting bearish conditions with a lower-highs setup. The cryptocurrency has also found acceptance below key hourly chart support of $10,060.
Even so, the sellers need to observe caution, as the recent pullback lacks volume support and may prove a bear trap, as seen in the chart below.
Selling volumes (red bars) have been consistently higher than buying volumes (green bars) through the price pullback from $10,950 to $9,855.