The fat lady may not be singing quite yet, but the bears are perhaps about to wrest control from the bulls and push the Bitcoin price lower. Is there still a possibility that the bulls can stop the rot, or could the $BTC price sink to $76K, $73K, or even $69K?
$BTC price about to break down?
Source: TradingView
The wedge pattern has been modified yet again in order to try and keep the $BTC price action within it. However, as can be seen in the above short-term chart, the price is now breaking out below the bottom trendline of the wedge. Is this the beginning of a sharper roll over and a descent to lower support levels?
Generally this type of bull pennant pattern is very bullish, especially when it sits on top of a big rally. It would mostly signal a continuation of the upside push, although given that it’s a pennant rather than a flag, this is perhaps slightly less likely.
Traders now have to come to the conclusion as to whether this current breakdown is genuine, or if it is perhaps a fakeout. There are already a couple of candle tails that came down but then were bought straight back up again. Could this breakdown turn out the same way?
If the $BTC price does continue down there is good support at $76K. If the price stopped there it would hardly be bearish at all, as the price could just carry on chopping sideways.
How far down could a correction go?
Source: TradingView
Moving out into the daily time frame it becomes apparent that this probably is a bona fide breakdown. The new daily candle has opened below the bottom trendline of the pennant.
The $BTC price looks to be going lower, so where is it likely to head for? We have the shallow scenario, which would only take the price down to $76K. Then there is the healthier target at $73K, which would be a 10% correction. Then there is the $69K - $70K support area which ties in with the 0.618 Fibonacci level and the 200-day SMA.
This latter target sounds like a good one. That said, it will have to be seen just how bullish the market is about Bitcoin. If the bullishness remains, it may not be possible for the $BTC price to get down as far as this level.
Can RSI trendline break hold?
Source: TradingView
While the huge green rally candle approaches the key resistance and taps the 50-week SMA, it’s also at the bottom of the chart where a major struggle is going on. The indicator line in the weekly RSI has broken through the downtrend line. If it can hold above at the end of this week it will be hugely important for the bulls going forward. However, with a correction potentially starting, will the bulls be able to achieve this?
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.
Source: Crypto Daily