Bitcoin followed global stock markets to the upside on Tuesday as US President Trump announced that the war could end in two to three weeks. However, with both the S&P 500 and Bitcoin ending the day at strong resistance, will major corrective moves resume now?
Big bounce in the S&P 500, but met with resistance
source: TradingView
The S&P 500 on the weekly time frame is showing a rounded top after reaching the upper limit of the 8-year channel. The index fell into the middle section of the channel before bouncing back roughly 3% higher on Tuesday.
Now that the price has come back and reached the most important resistance level, it remains to be seen whether the bulls will be able to fight back above it. With the Stochastic RSI in a prime position for this bounce, and the potential for the conflict in the Middle East to end, there is certainly potential for a breakout back to the upside. However, there is still potential for the price to be rejected from here before returning to confirm the midline as support, or even the horizontal support at 6,100.
Critical resistance encountered – is rejection more likely?
source: TradingView
There’s a lot going on on the short-term chart for Bitcoin price in dollars. First, combat Tuesday morning forecastthe price rose back to the bull flag, broke through the downtrend line, and climbed back above the neckline of the head and shoulders pattern, and It reached the key horizontal resistance level of $69,000which has been rejected so far.
Since then, the price has dropped back below the neckline of the head and shoulders, and may be in the process of rejecting from here as well, turning this into a confirmation of the pattern rather than a negation of it. If one looks at the Stochastic RSI indicators in this 4-hour time frame, it may indicate that the 3-day long stay at the top may be over, and this momentum may start to decline from here.
How far can bulls go?
source: TradingView
The daily chart shows the amount of resistance the pair is facing Bitcoin price in dollars Suffering now. First, there is the key horizontal level at $69,000. Then there is the neckline of the head and shoulders pattern, and finally, The 50-day simple moving average is also adding weight to the resistance.
If the bulls can push the price up through this, they will have a bearish bear market trend line waiting for them, and after all that, the price will still be in the middle of the bear flag.
If news from the Middle East starts to become more positive over the rest of this week, who knows how far the bulls could go? However, in the current situation, rejection at the current level seems the most likely outcome.
Mixed signals on the weekly time frame
source: TradingView
The weekly chart gives an interesting view of the situation. Either Bitcoin price in dollars Will the price break back above the major resistance level of $69k and through the downtrend of a bear market, or the bulls will fail here and the price will drop from the bottom of the bear flag and head to the next big level to the downside.
The rest of this week is really crucial. $66k and the bottom of the bear flag should remain. The Relative Strength Index on the Stochastic indicator shows that the indicators appear volatilewhile The RSI is moving its head across the downtrend line. Each time the previously downtrend was broken, it resulted in a significant uptrend spike.
These conflicting signals further complicate the decisions that individual investors, as well as institutional investors, may have to make. We must remember that the Bears are still in control. Will this remain the case until the end of this week?
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.
