After breaking down out of a fairly bullish setup, the $BTC price came down perfectly to retest what was an important bear market higher high at $82,825. This has now been confirmed as suppor
After breaking down out of a fairly bullish setup, the $BTC price came down perfectly to retest what was an important bear market higher high at $82,825. This has now been confirmed as support, so will the Bitcoin bulls restart what has become an amazing rally?
Source: TradingView
The short-term time frame chart above shows that generally all is pretty sound for the $BTC price thus far. Yes, the price broke down out of a wedge formation that was more bullish than bearish, but this latest correction has been very healthy all round.
The retracement has taken the $BTC price down to perfectly retest the bear market local high at $82,825, horizontal support, the 0.618 Fibonacci level, and a descending trendline. With all those support levels in confluence, a bounce was by far the strongest probability, and this did indeed take place.
It would not be expected that the $BTC price falls below these supports, especially given the significance of the bear market high. If it does, however, there is strong support at the 0.786 Fibonacci level at $81,700, and then the top of the parallel channel.
Source: TradingView
The daily time frame shows the perfection of the $BTC retracement to the exact tippy top of the second big bear market bear flag. If the price does fall through this level, there is plenty of support just below in the bear flag, and also at the top of the bull flag at the right hand side of the chart.
The Relative Strength Index (RSI) at the bottom of the chart illustrates how the indicator line has come back down to retest the top of the descending trendline. As long as this trendline holds, the upside price action should continue.
Source: TradingView
If you were of a bearish persuasion when regarding the $BTC price, you might say that the current weekly candle has rather a long wick to the upside. You could also possibly say that this rally has climbed really high already and that the market will need more time to digest this incredible surge.
Be that as it may, the setup still looks very bullish. We had the initial huge surge to the upside followed by the flag which enabled this rally to be absorbed. We’ve had a breakout of the flag, and the full measured move for this is to more or less exactly the second of the resistance levels from the top in the above chart - at $94,280.
This is a pretty major resistance, so if there was a big correction from there down to the low $80K area, it wouldn’t be too much of a surprise, or anything that would deviate from a new bull market.
Nevertheless, It’s probably up first. Expect a renewed impetus to the upside from Friday into the weekend - global bond markets allowing.
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.
