After coming down so far and so fast Bitcoin is hardly putting in a v-shaped recovery since bottoming at $99,000. Is this going to be a failed rally, and could Bitcoin head down to $94,000?
$BTC bulls need to hit $106,500 as absolute minimum
Source: TradingView
The $BTC price may have bounced before touching strong horizontal support at $98,000, but up to now the bounce is relatively weak. The downward trendline for the last reversal has been broken, but instead of climbing strongly Bitcoin might be faltering once again.
Of course, this might be just a small dip to confirm $102,600 as support, but if the bounce does run out of steam, and if $BTC gets rejected from the $106,500 horizontal resistance level, this would be another lower high, which could be followed by a lower low.
The major trendline isn’t too far below the current price so it would be quite normal to at least test it. Perhaps this could be a likely move, and maybe this would finally end up as the bottom.
At the bottom of the chart, the Stochastic RSI indicators are turning back down, and below this, the RSI indicator is possibly about to be rejected from the downtrend line. Both of these indicators are perhaps about to signal a lower low that is still to come.
Horizontal level and major trendline provide strong support below
Source: TradingView
The 2-day chart above looks fairly explanatory. If one looks left from the current price it can be seen that good price structure has formed a shelf of support from $102,000 down to $98,000. The major ascending trendline is also lending its support just below this.
It might be that the $BTC price comes straight down to retest the horizontal support and the major trendline first, taking advantage of the very poor market sentiment for Bitcoin. Or, the price could chop along for a week or two and allow a more complete reset of the momentum indicators.
All serene in the weekly time frame
Source: TradingView
The weekly time frame for $BTC looks quite serene. The major ascending trendline below the price has been retested only twice. So coming down for another retest now would make perfect sense.
High time frame Stochastic RSI indicators such as the daily and the weekly are at or near their bottoms, and the 2-week is coming down fast. These can signal huge upside price momentum, especially if they are in tandem.
Taking a Fibonacci from the $49,000 horizontal support, up to the all-time high, it can be seen that the 0.382 Fibonacci level at $96,400 is in line for a test if the price goes down from here. A bounce from the 0.382 would also be a very bullish one.
Looking at $BTC in this high time frame a bounce in the not too distant future looks more likely than not. That said, as a cautionary note, if the price does confirm below the major trendline and the 0,382 Fibonacci level, a plunge to at least the 0.618 Fibonacci at $78,000 would be a high probability.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.