Bitcoin has had a good week so far, with Wednesday’s daily candle actually rising through the top of the bear flag resistance. However, by the end of the day the price had fallen beneath again. The worry for the bulls is that upside momentum could start to evaporate. Do the bulls still have enough in the tank to effect this major breakout? Rejection within a broadening structure? Source: TradingView The short-term time frame for the $BTC price shows that it is moving up within a broadening channel. The problem here is that these sorts of widening structures generally signal increasing volatility and indecision. This is probably not the best formation to approach what is a major pivot point for Bitcoin. That said, if sentiment in the U.S. stock market remains as buoyant as it currently is , this could very well continue to spill over into the crypto market and help to keep providing upward momentum. What the bulls need is to get above the top of the bear flag and to stay there, preferably also breaking above $80,000 . If they can do this, the megaphone structure becomes less crucial, and the price can potentially remain within it until much higher, and safer levels are reached. There is also the possibility that this pattern is not a broadening structure, and that it is in fact an ascending channel with parallel top and bottom trendlines. If this is the case, there are a few candle wicks piercing the top, and the previous rise to the top of the channel was actually a fakeout. This current surge would also be a slight fakeout. There probably isn’t too much between either of these patterns. The main takeaway is that they lean to the bearish side, as in there is more probability that they break to the downside. Slight concerns in daily time frame Source: TradingView Zooming out a bit further into the daily time frame there are some slight concerns beginning to show. Could it be that the 50-day simple moving average (SMA) is beginning to have less of a curve on it? In the previous bear flag a similar thing happened which led to a crash. Also, look at the Relative Strength Index (RSI) . The tops of previous rallies were all marked by the indicator line rejecting from the descending trendline. Currently it can be observed that the indicator line is posturing to turn down once again. Not a good look. Could it be that there will be a rejection from here, and that the $BTC price will fall back to the bear market trendline and the bottom of the bear flag before rising again? It’s that or another big crash. Bearish trend about to return? Source: TradingView So what does the weekly time frame tell us? Drawing in the Fibonacci levels from the bottom of the 8-month bull flag in 2024, up to the all-time high, it can be noted that the $BTC price has bottomed beautifully at the 0.786 Fibonacci , the deepest of these levels. However, since then, the price has gone back twice now to retest the 0.618 Fibonacci level on the way down. Is the price to be rejected again from what can be seen to be very important resistance? It must be borne in mind (and with the current big upside rally this is perhaps difficult to remain aware of) that we are still in a bearish downtrend. Only if this current resistance is overcome, and the price gets back to around $100,000, can the bear trend be truly said to be over. As it stands, it rather looks like the price could be rejected again, which could set the bearish trend back in motion, perhaps taking the price all the way back to $66,000. The 200-week SMA could be in place by then to provide ultimate support, where perhaps a double bottom will occur that can finally mark the bottom of this bear market. 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.
