Following on from Friday’s mega-crash the Bitcoin price recovered as far as the $116,000 horizontal resistance level. Here it was rejected, and the price has since fallen to $112,000. Is the recovery still on, or was the crash the trigger for a further move to the downside?
$BTC price rejected from resistance – will support hold?
Source: TradingView
The Sunday/Monday $BTC recovery was in excellent shape until it hit the $116,000 horizontal resistance level. After a couple of attempts by the bulls to pierce through this barrier, they were soundly rejected and the $BTC price has since sunk back to the $112,000 support level.
Is this problematic for a continuation of the recovery? Not at all really. After a strong bounce there was bound to be some choppiness to the downside as well as up. That said, there are important levels to hold, and these would include the trendline, and the horizontal support at just under $109,000.
With the Stochastic RSI indicators on their way down from the top, the bulls will be hoping that they can reach the bottom without pulling the price too far down.
Support trendline increases in importance
Source: TradingView
The daily time frame helps to highlight the importance that the trendline has. The trendline is raised slightly in order to increase the amount of touch points. This does mean though that there isn’t a lot of downside to play with before the $BTC price comes back to test this trendline again. If the price falls through and confirms below, the $109,000 horizontal support level and the 200-day SMA are possibly all that remain to keep the price falling all the way to $100,000.
At the bottom of the chart, the Stochastic RSI indicators in the daily time frame are shaping to cross back up. The bulls will be hoping that this will indeed occur, and that this will signal upside price momentum.
$BTC rests on excellent support
Source: TradingView
While the current candle in the weekly time frame does look rather ugly, it is still very early in the week and it may look a lot different by the end of the week.
What has been done in the weekly chart above is to draw attention to the excellent support that the $BTC price is resting on currently. The small green arrows highlight this support and show that $112,000 and $109,000 could continue to provide a base for the price going forward.
Given that the trendline has become increasingly important for upside price movement, the upper of the two horizontal supports is critical for a hold, although there is the possibility that the price could wick down to the lower support and still end up holding at $112,000.
At the bottom of the chart, the Stochastic RSI indicators are angled down. This will need to change over the course of this week if the bullish scenario is to triumph.
If the price does fall through these strong supports and confirms below, $100,000 could just be a pause on the way further down. This could eventually end up turning into a big double top, just like in the 2021 bull market, or the price may have already entered the bear market. This all still remains to be seen.
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.
