The Bitcoin price rose to nearly $98,000 on Tuesday, but since then the price has sunk nearly all the way back down to the $94,500 breakout level. A distribution phase has taken place over the last couple of days. Will Bitcoin now head up to $100,000, or are we going to get some more sideways or downwards price action first?
While some on social media are already calling for a failed $BTC rally and a descent back into a bear market that is still in its early stages, the short-term chart is possibly suggesting a different directional path.
While the $94,500 horizontal support holds, the current breakout is still perfectly valid. Many might have wanted to see the price rocket up to $100,000 as soon as it had broken out, but the situation was that the bulls had expended a lot of effort in the breakout, and there needed to be a decent phase of consolidation in order for upside price momentum to start to build again.
Yes, the $BTC price has fallen through the ascending trendline, but this has served to allow the froth to dissipate and the price to regain itself before climbing higher.
As can be seen at the bottom of the chart, the 4-hour Stochastic RSI has now reset. The 8-hour and 12-hour have started their descents. By the weekend the price could once more have a good head of steam behind it.
The daily chart shows what could be the first consolidation phase on the way to $100,000. This time though the key to price is in the Relative Strength Index at the foot of the chart. It can be observed that the indicator line appears to be rejecting from a 14-month trendline that stretches all the way back to November 2024. It also has to be borne in mind that bearish divergence has built up as this trend has descended, while the price action has risen.
With the relatively recent rally to the upside, it can be noted that an uptrend line is forcing the indicator into a tightening space against the descending trendline, where the indicator will go one way or the other, possibly before the end of January. If it’s to the upside, it could cause an explosion in the $BTC price action, but if it’s to the downside, it could spell the end of this rally.
The weekly time frame for $BTC is painting a bullish picture. Yes, there are all sorts of indicators that might suggest that this is no more than a bear market rally, but it’s usually best to keep things simple.
The price is breaking out of an ascending triangle (a bullish pattern) and should it remain above by the end of the week, the following weekly candle can confirm the breakout on this high time frame.
At the bottom of the chart, the Stochastic RSI indicators are signalling strong upside price momentum. As long as they both stay above the 20.00 line by the end of the week, this momentum should begin to make itself felt in the price.
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