Bitcoin (BTC) price moves are keeping the market on tenterhooks. One moment it looks as though there will be a rally back to the all-time high, and the next, the Bitcoin price loses an important trendline. Is this just noise, and will an approaching surge/dip define Bitcoin’s direction for the next few months?
This latest reversal has taken the $BTC price down as low as $108,000, and while the price has rallied back strongly from that low, it is now the wrong side of the important ascending trendline. In fact, this trendline, combined with the $112,000 horizontal resistance, and the small local descending trendline, have all come together to form a strong barrier that will be difficult to overcome.
Looking on the positive side, the candle wick down to $108,000, as well as being bought up quickly, has set a higher low, as long as there is no further downside.
This 7% reversal has succeeded in marking time in order to allow the short-term momentum indicators to partly reset. Perhaps some more choppy price action for another day or two will enable a complete reset, giving the $BTC bulls the best preparation for an attempt at the all-time high.
The daily chart for the $BTC price illustrates the strong support that is also being supplied by the 200-day SMA. Price has fallen through this important moving average during this bull market, and it has confirmed below on three previous occasions. However, these periods have been short lived, and strong rallies have been the result each time the price regained above this SMA.
The daily Stochastic RSI at the bottom of the chart is the last of the shorter time frame RSIs to begin coming back down. That said, it does need to be borne in mind that the 4, 8, and 12-hour indicators are bottoming.
Way out in the monthly time frame it has to be acknowledged that things do look concerning. The big worry here is that we are one day from the monthly close, and the size of the candle wick above is very long. In fact, looking back over the whole of this bull market and back to the twin peaks of the 2021 bull market, this is one of the longest wicks to the upside.
There is still 1 day and 16 hours for this to change, but if it doesn’t, there are also two previous long candle wicks, with the candle bodies trapped below the $116,000 horizontal resistance level. As it stands, this looks like strong rejection from the 8-year ascending trendline.
To cap it all in this time frame, the Stochastic RSI indicator lines are heading down, and the RSI indicator line has been rejected from the downtrend line – very strong bearish divergence is waiting in the wings, ready perhaps to signal the end of this bull market, and a descent into the next.
Read more on cryptodaily.co.uk
