Bitcoin (BTC/USD) continued the downtrend last week, before finding support in the early hours of 11 September at $9 855 ($13 064 CAD) and the 0.618 Fibonacci retracement level of the prior impulse wave from $9 320 to $10 949 ($12 355 – $14 514 CAD) on the daily chart.

BTC has since found itself stagnating, and range-bound, between $10 200 and $10 467 ($13 522 – $13 876 CAD) for the past 3 days now, unable as of yet, to regain the $10 400 to $10 467 ($13 790 – $13 876 CAD) range as support, which is also aligned with both the 50-day and the 100-day simple moving averages (MA50 and MA100).

$10 400 ($13 790) was the prior week’s candle close (02 September), and sits right at the 50% retracement level of the prior downturn on the daily chart from $10 949 to $9 855 ($14 514 – $13 067 CAD). $10 467 ($13 876 CAD) is the 0.382 retracement level of the larger corrective swing from $12 325 to $9 320 ($16 342 – $12 357 CAD).

BTC has since opened the new week at $10 320 ($13 682 CAD), close to the larger weekly trend line resistance which connects the $13 880 ($18 403 CAD) peak, although it is yet to be seen whether there will be a weekly close above this trend line, and whether that resistance will then hold as support.

Volume on the weekly chart has been gradually declining as BTC closes in on the larger triangle apex, and the lack of direction in the global economy is more than likely contributing to bitcoin’s indecisiveness.

ADX/DI (trend strength/trend direction) is currently still bullish on the weekly chart, with +DI still above -DI, however, trend strength is still declining on a weekly basis since the recent $12 325 ($16 342 CAD) peak, although trend strength is still well above the 25 level, currently sitting at 49 at the time of writing, so the bullish trend is still very much in tact on the weekly chart.

If the current rally fails, there is major horizontal support at $9 770 ($12 952 CAD), the 0.382 Fibonacci retracement level of the entire move from $3 122 to $13 880 ($4 139 – $18 401 CAD), which held during the downturn last week, and if that level breaks, the next major level of support is the $9 386 ($12 444 CAD) larger triangle support which has held strong after 4 retests since the $13 880 ($18 403 CAD) peak, although there is a strong possibility that this support level will be unable to hold on a 5th retest attempt.

Below triangle support, there is $8 500 ($11 269 CAD), the 50% retracement level of the overall move from $3 122 to $13 880 ($4 139 – $18 401 CAD), although if BTC manages to retrace that far, there is a strong possibility that BTC will go on to retest $7 700 – $8 200 ($10 208 – $10 871 CAD), $7 700 ($10 208 CAD) being the 100-week simple moving average (MA100), and $8 200 ($10 871 CAD) being major horizontal support on the weekly chart. This range also aligns with the 200-day simple moving average (MA200) as support.

Bitcoin then has major support in the $6 600 to $7 200 ($8 750 – $9 546 CAD) range. $6 600 ($8 750 CAD) is currently the 50-week simple moving average (MA50), and $7 200 ($9 546 CAD) is both the 0.618 Fibonacci retracement level of the overall move between $3 122 to $13 880 ($4 139 – $18 401 CAD), as well as the 1.386 Fibonacci extension level of the initial drop from $13 880 to $9 049 ($18 401 – $11 999 CAD).

If the current rally does continue, however, BTC still needs to regain $10 531 to $10 600 ($13 964 – $14 056 CAD), which is between the 0.618 Fibonacci retracement level ($10 531) of the prior downturn on the daily chart from $10 949 to $9 855 ($14 514 – $13 067 CAD), and major horizontal resistance at $10 600 ($14 056 CAD).

The next major level of resistance will then be $10 822 / $10 842 ($14 349 / $14 376 CAD), $10 822 ($14 349 CAD) being the 50% retracement level of the prior corrective swing from $12 325 to $9 320 ($16 342 – $12 357 CAD) on the weekly chart, the 0.886 Fibonnaci retracement level of the prior downturn from $10 949 to $9 855 ($14 514 – $13 067 CAD) on the daily chart, as well as the 1.618 Fibonacci extension level ($10 842) of the recent impulse to $10 465 ($13 873 CAD) on the 4-hour chart.

Above $10 822 ($14 349 CAD) and the $10 949 ($14 514 CAD) horizontal resistance level of the past month, BTC could potentially go on to retest $11 177 ($14 817 CAD), which is the 0.618 Fibonacci retracement of the prior corrective swing from $12 325 to $9 320 ($16 342 – $12 357 CAD) on the weekly chart.

A weekly candle close above $11 982 ($15 883 CAD), major horizontal resistance and the 0.886 Fibonacci retracement level of the prior corrective swing from $12 325 to $9 320 ($16 342 – $12 357 CAD) on the weekly chart, will more than likely result in a continuation of the weekly bullish uptrend towards new yearly highs.

Volume has been gradually declining with every rally on the daily chart, which may indicate that bulls are reaching a point of exhaustion and BTC is still under a bearish Ichimoku cloud on the daily chart, which is a collection of technical indicators that show support and resistance levels.

This, along with an impending death cross between the 50-day simple moving average (MA50 currently sitting at $10 480 ) ($13 892 CAD) and MA100 (MA100 currently sitting at $10 423) ($13 817 CAD), could potentially mean that any potential upside is limited, before a continuation of the downtrend from $10 949 ($14 514 CAD).

Looking at the 4-hour chart, ADX/DI shows bearish trend direction but trend strength is below the 25 level, and +DI is starting to converge with -DI, so the momentum hasn’t just arrived yet for the short term bearish case.

BTC also had a bullish cross on Sunday, between MA100 and MA200 on the 4-hour, and Ichimoku cloud is beginning to show a bullish twist, so there could be a potential retest of $10 531 ($13 960 CAD), which is sitting right at larger trend line resistance and aligns with a 0.618 Fibonacci retracement of the prior corrective downturn from $10 949 to $9 855 ($14 514 – $13 067 CAD).

The bearish case will be a daily close below $9 770 ($12 951 CAD) and a weekly close below $9 386 ($12 444 CAD). The bullish case will be a daily close above $10 600 ($14 051 CAD), and a weekly close above the $10 822 to $10 949 ($14 349 – $14 514 CAD) range of resistance.