As expected, the $BTC price has broken out. After pushing through the convergence of the major ascending trendline, and the downtrend, the price emerged to the upside on Monday morning, with a quick rally to $90,000. Given that this is strong horizontal resistance, the price has stalled at this level. What’s next?
Is money leaving silver for $BTC?
Source: TradingView
The silver chart possibly has something to do with the current $BTC breakout. After opening on Sunday night with another big surge, the silver price hit $84 and an ascending trendline. This was enough to reject the price and $10 was lost in quick succession.
It can be observed in the daily chart above that the price has come back to $74 where a bit of a bounce is taking place. Could it be that speculative money left silver and entered a very beaten down Bitcoin? Gold also fell around 1.8% overnight.
A strong breakout – rejected at $90,000
Source: TradingView
The 4-hour chart for $BTC shows that the price would appear to have broken out strongly, after remaining below the major trendline for the entire weekend. However, the price has been rejected from the strong $90,000 horizontal resistance level, and is now breaking back below the $89,500 resistance.
There was a reasonable volume spike for the breakout candle in this time frame, but since then, volume has begun to decrease for the last two 4-hour candles. Of course, a test of the major trendline probably needs to take place, and it might be that the price even comes below to test the downtrend breakout.
The Stochastic RSI indicators look as though they could go along with this thesis, as they are angling down from the top now.
A breakout test to happen imminently
Source: TradingView
The daily chart reveals that the $BTC price has continued to decline from the $90,000 resistance level and has almost reached the major ascending trendline and the $88,000 horizontal support. A test of the major trendline is probably going to happen imminently.
It could be that the bears take this opportunity to force the price back through the ascending trendline and even back under the downtrend in order to complete a big fakeout.
For the bulls, the Relative Strength Index is showing a breakout of the downtrend line. If the indicator line can remain above, this would certainly favour a continuance of the breakout in the price action.
Now the bounce?
Source: TradingView
In the weekly time frame the $BTC price can be seen to have now come all the way down to horizontal support at $88,000 and the major ascending trendline. Therefore a test of these important supports has now been made. It now remains to be seen if the price will bounce back to the upside.
At time of going to press, the price is trying to bounce, but as mentioned earlier, there is the possibility that it could fall all the way down to the downtrend line and retest this. The next hour or two will tell us which of these two scenarios will play out, or even if a third scenario of a collapse could take place?
All this said, a bounce from here, after a proper test of the breakout, is the more likely probability. Could this be the very beginning of a new upside leg for Bitcoin that eventually rallies strongly back towards the all-time high?
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.