US President Donald Trump boosted the US stock market on Monday with comments suggesting that the war with Iran could soon be over. The S&P 500 turned up sharply, and the Bitcoin price has continued its bounce. Can the bulls push the price to a local higher high?
$BTC price reaches $71K but low volume prevents breakout
Source: TradingView
While it can be seen in the short-term chart above that the $BTC price has reached a minor trendline, plus horizontal resistance at $71,850, it might not have the impetus to break through. Volume is very low for such a breakout and so it might be expected that the price is rejected here and that it comes back down, perhaps at least to the major $69,000 level which is now support again.
If the bulls are able to get above this resistance and the trendline, the last pivot high of $74,000 would be the absolute minimum target in order to preserve the bulls’ hopes of a trend change.
Short pause or lower high?
Source: TradingView
The daily time frame view probably gives a better overview of the current situation. A couple of decent length green candles have just been stopped in their tracks by the combination of the horizontal resistance and the minor trendline. It can also be seen at the bottom of the chart how the volume bar is still very low. Of course, there’s a lot more time in the day for this to change. Positive statements out of the Middle East conflict could help to bring this about.
If the $BTC price is rejected from here, this would mean a lower high, a potential end to this particular attempt by the bulls at a trend change, and a likely drop to at least $66,000, with the possibility of a plunge down to $60,000.
Bear flag continues to emerge
Source: TradingView
The weekly chart is bullish if the descending channel is taken into account. However, another big bear flag looks as though it is starting to emerge. If the $BTC price is able to break out above $71,000 and surges higher from there, all eyes should be on from where the price is eventually rejected.
If the price touches the top limit of the bear flag and comes back down, this would be a big warning that the flag is definitely in play. There could still possibly be one more attempt at breaking through, but if that was also rejected, then stand clear below. A break to the downside could bring the price down to less than $50,000.
With all that bearishness out of the way, the Stochastic RSI is a ray of light. The indicator lines have crossed up, and by the end of this week, or possibly the next, they could be above the 20.00 level where they would signal big upside momentum.
Will Bitcoin surprise everyone and break out of the descending channel and move back to the all-time high, or is this just a bear market rally with another big leg down still to come?
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
