With all short to medium term momentum indicators having reset, Bitcoin bulls look to be preparing for one big push back to the top of the bear flag and the $80K horizontal level. Can the $BTC price get there? Can a potential huge breakout occur?
$BTC price comes down perfectly to bounce at 0.786 Fibonacci level
Source: TradingView
With the $BTC price having fallen out of a rising wedge pattern, formed by the ascending trendline and the top of the bear flag, one would have thought that a new downward leg would have ensued – potentially taking the price back to the bottom of the bear flag. Especially considering that the breakdown was perfectly tested and confirmed at $78,000.
However, if one draws in the Fibonacci levels from $74,000 up to the $79,500 local top, it can be seen that the price came perfectly down to test the 0.786, the deepest of the Fibonacci levels at $75,000. There is a good probability that the price should rise from here.
In addition, given that the Stochastic RSI indicators in the 4-hour, 8-hour, 12-hour, and the daily, are all resetting at their respective bottoms, it would appear that the bulls have a great opportunity to send the $BTC price back up, make a higher high, and even break out of the bear flag.
First golden cross about to take place
Source: TradingView
The highlight in the daily time frame is that the 50-day SMA (blue line) is about to cross over the 100-day SMA (green line). This is technically a golden cross, although the real golden cross is a cross up of the 50-day SMA above the 200-day SMA (red line). If there is a decent breakout, the 200-day is not that far above.
Drawing in the Fibonacci levels from the $60K pivot low, up to the highest high of the bear flag, once again we can see that the $BTC price has come down perfectly. This time it’s to the 0.236, the shallowest of the Fibonacci levels at around $75,000. If the price does continue to bounce from here, this could be very bullish.
Another bullish factor is that the daily Stochastic RSI indicators have managed to almost completely reset with very little reduction in the price. The daily is the first of the higher time frame indicators, so this is quite a big deal.
A real chance for the bulls to break out
Source: TradingView
Looking at the weekly chart for the $BTC price, it must be said that there is still a real chance for the bulls to break out if they will only take it. A confirmed breakout of the bear market trendline has taken place, and the Stochastic RSI indicators in this high time frame are signalling maximum upside price momentum.
Yet again, now in the weekly time frame, we draw in the Fibonacci levels and we can see that the current correction from the all-time high has taken the price down to the deepest 0.786 Fibonacci level. Structurally, this is a perfect place for the downtrend to turn back around, even though many analysts will still be calling for a bear market to match the previous ones, which would mean that it would need to endure into Q4 of this year.
If this bear market is to buck the trend, there is a very tall order in front of the bulls. To entirely wipe out the downtrend, this rally will need to take out the last pivot high at $98,000. Anything less than this, and it will be a failed rally. This current breakout attempt of the bear flag needs to be successful, and it needs to happen soon while momentum is with the bulls. $74,000 is the critical level to hold.
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.
