As Bitcoin continues to fall or chop sideways it is still respecting a major ascending trendline in play since October 2023. At the same time, the downtrend is still intact and is forcing the $BTC price lower. As these trendlines converge will Bitcoin break up or down?
$BTC price squeezing into a tightening space
Source: TradingView
The 4-hour picture above tells the story that the $BTC price is managing to stay within the confines of a bear flag, and that the bottom of the bear flag is sitting slightly below the major ascending trendline – two trendlines helping to keep the price up.
However, the price is approaching the downtrend line that has been respected since the $126,000 all-time high. Add to this a decent horizontal resistance at $88,000, and you have an ever decreasing space into which the price is being squeezed.
If the price continues to the apex of the two trendlines this will take a maximum of five more days, after which the price will either break the downtrend, or fall under the major ascending trendline.
200-day SMA inclining downwards
Source: TradingView
The daily time frame reveals that the 100-day SMA has also dropped below the 200-day SMA. This follows the 50-day SMA doing the same thing previously, whereby it formed the ‘death cross’.
One thing that really does have to be noted though is that the 200-day SMA is now starting to show a more pronounced inclination towards the downside. This is the first time this has happened during this bull market, apart from a slight downward inclination during the 8-month bull flag. This can be taken as just one more sign that the coming battle of the trendlines could be crucial to the continuance of the bull market.
A drop to the previous bull market high is a possibility
Source: TradingView
In the weekly chart yet another support lends its weight to the bull case in the form of the 100-day SMA. The chart illustrates that this moving average has risen to just below the bottom of the bear flag.
Putting the bull case aside, and assuming that the price will end up falling through trendlines and moving average, the band of support below, from $74,000 down to $69,000 is an incredibly strong base, and is arguably the strongest horizontal support in Bitcoin’s history. If the $BTC price did get down to it, and held, this could be an amazing level from which to make the fightback.
At the bottom of the chart the Stochastic RSI indicators are posturing to turn back down. If they do so, this could signal the possibility of a drop down to the major horizontal support. Are we already in a bear market, or do the bulls have one more throw of the dice?
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.