Despite the sell-off in the AI and precious metals sectors due to poor U.S. inflation data, Bitcoin came back from the brink on Thursday, having broken down below its ascending channel. The b
Despite the sell-off in the AI and precious metals sectors due to poor U.S. inflation data, Bitcoin came back from the brink on Thursday, having broken down below its ascending channel. The bulls rallied back strongly and the $BTC price ended the day back inside the channel. Is this the first warning of a big breakdown, or is this a sign that the rally is not over yet?
Source: TradingView
Having broken down below the big ascending channel, the $BTC price looked done for as it fell to around $79,700. This was below the $80,300 horizontal support level, and it just needed a quick confirmation to flip this support into resistance.
Once again, the bulls came to the rescue, and they were sorely needed. In the space of three hours the $BTC price rose strongly, leaving $79,700 behind and attaining $82,550. Not only was the price pushed up and back into the channel, but it also broke back above the strong horizontal level at $81,750.
Currently the price action looks to be forming a small bull flag, with the underside of the flag the bottom trendline of the ascending channel. It might be expected that the price heads further up from here with the next stop the $83,900 resistance.
Source: TradingView
As usual, or so it would seem, the $BTC price is in a critical position. If the rally can somehow continue, the targets are in the chart above, with $97,880 the definitive end to the bear market. A break to the downside from the current situation would likely lead to $76K, or $70K and lower, with a possible retest of the bull market trendline.
While the $BTC price continues to hold inside the ascending channel, the bullish thesis prevails. Therefore, the more likely scenario is a rise to test the strong $83,900 horizontal resistance level. A break of this would leave the path open to $90K.
At the foot of the chart, the Stochastic RSI indicators are approaching the bottom of their limit. A cross back up of the blue indicator line over the red indicator line could signal that upside price momentum would not be too far off. Could the rally be setting up to reignite?
Source: TradingView
The weekly chart shows us that Bitcoin is not out of the fire yet. If the $BTC price does not get back up to the $83,900 resistance level by the end of play this Sunday, the next weekly candle could open on the wrong side of the ascending channel lower trendline. This is practically a breakdown by default, and can wreck the bulls’ chances of maintaining the rally.
The $BTC price is now starting to lift away from that trendline, so the next three days will be very important for the bulls to get up a head of steam and try to break up and through the resistance. If they can do it, $90k becomes a real possibility.
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.
