The Bitcoin (BTC) price is currently breaking beyond a downtrend line that started at the all-time high back in early October. Is this finally the beginning of a rally that takes Bitcoin back to the high, or could this just be another fakeout?
$BTC price breaks through downtrend and resistance
Source: TradingView
While it is still very early to call, $BTC has just opened a new 4-hour candle above the descending trendline. Not only has it done this, but the price has also broken beyond the $91,400 horizontal resistance level. As long as the price holds above these two important resistance milestones, a move up to the next horizontal resistance at $94,000 is the next logical step.
Why this time is different
Source: TradingView
The daily chart illustrates how the $BTC price has tried to break through the descending trendline on a couple of previous occasions, and that it had failed to do so. Why should this time be any different?
To start with, the price has come down 36%, which tarries with past big bull market drawdowns. Secondly, the price has come down to a major ascending trendline which has to be seen as ‘the’ bull market trendline for this cycle. Thirdly, not one market top indicator signalled when Bitcoin was at the $126,000 all-time high. It would seem that there is life in this bull market yet.
At the bottom of the chart, the RSI reveals that the indicator line is working its way back up again, having reached the bottom when the price action also reached its nadir of $80,000. This could well be the next wave back to the top.
Price and indicators are turning around
Source: TradingView
The weekly chart for $BTC shows that this is a perfect place for a breakout. Historically, the $BTC price will usually break out of a wedge pattern around two thirds of the way along it, and almost always before it reaches the end.
The Stochastic RSI indicator lines have bottomed, and are angled upwards nicely – not far now from the 20.00 level which is the signal for a big influx of upside price momentum.
At the bottom of the chart, the MACD is revealing the beginnings of a potential slow turn around of the indicator line, while the pink bars are continuing to decrease in size. A move back above the zero level for the indicator lines, and a change back to green bars in the histogram would signal that the first new shoots of change are turning into real growth.
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.
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Author: Laurie Dunn
