The latest Bitcoin rally remains intact as the S&P 500 gained almost $1.3 trillion on Thursday on reports that the US had announced an end to the war against Iran, although Iran is still to s
The latest Bitcoin rally remains intact as the S&P 500 gained almost $1.3 trillion on Thursday on reports that the US had announced an end to the war against Iran, although Iran is still to sign an agreement. Can the $BTC price break out to $66K or will bear market gravity pull the price down again?
Source: TradingView
The short-term chart illustrates that the $BTC price action is still evolving. A bear flag now looks more like a bear pennant. A different name for the pattern, but it’s still bearish overall. The main thing with this pennant is that it can be seen exactly how long it will take before a break to the upside or downside will take place.
Another thing to consider is that the pattern will usually break before it comes to the end, at least as far as Bitcoin is concerned. The probability is that the price will lose the $63K support level and then break through the bottom of the triangle after a failed attempt to turn the 50 SMA into support.
If on the other hand the bulls are able to force a breakout to the upside, a continuation of the rally into the high $60Ks could even be the outcome. A prompt signed and sealed agreement by both the US and Iran to end the war could potentially make this bullish scenario a reality.
Source: TradingView
Despite the strong support from the bull market trendline and the double bottom horizontal level at $60K, the daily chart is still leaning to a continuation of the bear market.
The Stochastic RSI indicators are heading up, supposedly signalling upside price momentum, but in all the shorter-term time frames the indicators are at the top, ready to come down.
The bear flag doesn’t necessarily have to play out its full measured move to the downside, taking the $BTC price down to $44K, but now with the bearish pennant having materialised, a drop at least to the bear market trendline would be a logical next step.
Source: TradingView
Zooming right out into the 2-week time frame and taking the tops of the previous bear market into consideration, a band of support can be drawn from around $63,400 down to $60,000. So far in this bear market, no candle bodies have closed in this support area, despite approaching the 20th week of attempts by the bears. The chart is telling us that this is adamantine support.
Also, we have the bull market trendline adding its last ditch support to the $BTC price, and it can be seen that this is being respected so far.
All this said, the Stochastic RSI indicator lines have crossed back down, potentially signalling a huge fall-off in upside price momentum. Notwithstanding, this indicator still has a week and 2 days left to close, in which time the indicator lines could straighten out.
Next week could provide a signal as to whether the $BTC price could be putting in a bottom now, or whether massive support might be about to crack and break. If the support does fail, $40K looks like the next stop, and even $30K could provide an eventual bottom.
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.
