The Bitcoin price did manage to tap $117,000 late on Monday, but the bears firmly rejected this rally attempt and squashed the price back down even further to $114,600. Will the bears continue to win these battles or is a much more definitive bounce coming for Bitcoin?
$BTC price tests the 0.786 Fibonacci level
Source: TradingView
The 4-hour time frame for the $BTC price shows how messy the bull flag is becoming. Fakeouts to the top and bottom have resulted in the price generally chopping sideways rather than angling down. That said, the price is now back inside the flag, and a quick escape attempt to the upside by the bulls was met at the top of the flag by the bears and rejected soundly.
What we’ve now seen is the price retest the 0.786 Fibonacci level. The initial bounce from this support needs to gain strength and head back up again. If this does not hold, the price could slip back down to the bottom of the flag, which could coincide with the $112,000 support.
At the bottom of the chart, the Stochastic RSI indicators are heading back to their lowest point again. However, all the other short-term momentum indicators are already at the bottom, leading one to surmise that upside price momentum could be inbound soon.
A bounce from here makes sense
Source: TradingView
The daily chart puts into perspective how the current price would be a great place for a reversal back to the upside. The ascending trendline is also the neckline of an inverse head and shoulders pattern. So given that upside momentum could shortly be coming back to the $BTC price a bounce from here makes sense, market perversity allowing.
At the bottom of the chart, the Stochastic RSI indicators on this daily time frame have nearly bottomed out, while on the RSI, the indicator line shows that it could be about to bounce from the descending trendline.
Ascending trendline playing a major role
Source: TradingView
The 2-week chart reveals just how important a role the ascending trendline is playing. It would appear that to avoid a drop down to major support at $109,000 the $BTC price will need to stay above this trendline.
If the price can bounce from here, and the bounce is a big one, both the Stochastic RSI and RSI indicators can break through their descending trendlines. As things stand, these trendlines are signalling bearish divergence, as they go down, while the price goes up. The RSI indicator is the really important one here. Not only will it need to break above the descending trendline but it will also need to surpass a height of 87.7 in order to nullify the bearish divergence.
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.
