Bitcoin has reached the point where it has knocked on the door of the 6-month downtrend line. With some good news out of the Middle East, can Bitcoin buck the improving sentiment trend and break out to the upside? Do bulls need more time to replenish their strength? Or could the bear flag keep coming?
$BTC price reaches $72,800
source: TradingView
On the 4 hour time frame it appears to be… Bitcoin price in dollars It declines at the $71,700 horizontal resistance level. The price broke through this resistance late Tuesday, but a quick 4-hour candle wick reaching $72,800 and the bear market trend line was rejected immediately. The price is now back below the horizontal resistance level, and it is possible that it will eventually be rejected from there as well.
If the bulls can continue this rally, and the downtrend is broken, they will still have a strong $74,000 resistance level to contend with. On the other hand, if buyer fatigue starts to affect the price, it may come back to retest and confirm the $69,000 level as support. The bear flag’s lower trend line and the strong horizontal support of $66,000 are also potential bounce targets.
Redraw the downtrend line
source: TradingView
In the daily chart The bear market trend line has been redrawn Just touch the tip of the wick to perform the final test in January. This means that the current Bitcoin price in dollars It has not yet reached the trend line. However, it is well above the major support level and holding above it as well 50-day simple moving average (blue line).
At the bottom of the chart, the indicator line of the RSI stands proudly above the recent downtrend line. The last two times these downtrends have been broken, the price has risen nicely.
The trend is still down
source: TradingView
If the ceasefire holds, and news from the Middle East improves, this may be just the kind of incentive the United States will pay. Bitcoin price in dollars It needs in order to break above the downtrend, and start changing trend around it.
At the bottom of the chart, The RSI line breaks above its downtrend line. On this higher time frame these trend breaks have much greater validity.
However, there are still uncomfortable factors that tell us that this bear market may be far from over. One of the most important is the bear flag. Although we have seen a recent rally from below the flag, unless the price breaks out of the major downtrend, we could still see the price drop outside the flag to… Much lower levels.
The current trend is still bearish, so we will have to keep a close eye on what happens over the rest of this week. The short-term Stochastic RSI is reaching its highs, so if the price retests the downtrend, it will likely be rejected.
Disclaimer: This article is provided for informational purposes only. It is not provided or intended to be used as legal, tax, investment, financial or other advice.
