Moving upward in tune with the bullish sentiment for the U.S. stock market, the $BTC price is poised to rise to the top of its bear flag. A breakout from there would likely see Bitcoin confirm a trend change back to the upside. Do the bulls have what it takes to do this?
$BTC price basing – ready for a bounce
Source: TradingView
The $BTC price action continues to look positive. With the 4-hour Stochastic RSI indicators well on their way down, the price appears to be basing above the strong $74,000 horizontal support and a descending trendline. If the price manages to hold above this level until the indicator lines bottom, a bounce that could take the price up to the top of the bear flag could be next.
Bullish and bearish case in the daily time frame
Source: TradingView
The daily time frame for the $BTC price suggests several possibilities. For the bullish case we have a higher high. If this is followed by a higher low (a fairly likely prospect), the change in trend can probably continue to gather validity.
When looking at the chart, it can be seen that a possible wedge pattern has formed, and that the price has just broken out and is looking to confirm above the pattern.
In contrast, for the bearish case, the bear flag still looks to be the more solid pattern, and if the price is firmly rejected from its top trendline, this could lead to a drop back to the bottom, and a potential downward exit from there.
Besides the 100-day simple moving average (green line) acting as resistance right now, $75K and $76K are also levels that need to be broken even before the price can arrive at the top of the flag.
Finally, the daily Stochastic RSI indicators could be taken either way. They are at the top so they are signalling peak bullish momentum, but it will then depend on whether they stay bouncing around at the top, or if they roll over and come all the way back down. At least in this daily time frame the jury is still out.
2-week RSI trendline breakout
Source: TradingView
There’s nothing like a really high time frame chart to see with a clear perspective exactly how the struggle is going between the bulls and the bears.
Here on the 2-week time frame one can observe that the current candle looks to be crossing through the main bear market trendline. If this is still the case in 10 days’ time, the breakout would be well on the way to a confirmation.
What really helps the bull case is the fact that the RSI trendline has pierced through the descending trendline. If one looks back at the last two times this happened, it can be seen that the result was two big rallies to the upside – the first of 86%, and the second 69%.
It also might be taken into account that this time there is a lot more room to run, given that the indicator line came down almost to the 30.00 level.
Furthermore, the Stochastic RSI indicator lines are poised to move up above the 20.00 level. If they can get there, this would provide the huge upside price momentum that could take the $BTC price back to the all-time high.
One thing to bear in mind though – it’s early days yet.
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.