The Bitcoin price finds itself in a sweet spot as far as the major world financial indicators are concerned. All three of bond yields, the dollar, and oil are falling on Tuesday, a mix that is perfect for Bitcoin to make some hay. Up around 2% on the day, can the $BTC price take full advantage of this benevolent setting?
Bond yields topped?
Source: TradingView
Could this finally be a respite from a most dogged rise in US bond yields which saw the 10-year yield surpass the previous high set back in June 2007? The above weekly chart tells us that yes, the yield looks as if it has topped for now, and is possibly making its way back to around 5%. Two topping tail candles mark the top, with the second of these resembling a shooting star candle, which is normally found at the tops of rallies. A descending trendline touches the top of the wedge pattern below, and forms the first support level for the descending yield. 4.8% is the next support level under this, and then there is the top of the wedge at around 4.5% or lower.
Is the $BTC price inside an ascending channel?
Source: TradingView
Ever mindful of the evolution of the price action, it appears that what used to be two distinct and separate channels are lately combining together. In fact, probably the best explanation for the price action may actually be a rising channel. The fainter purple lines pass through the extremes of the price action, making this a very possible valid thesis.
If this is the case, this would point to a potential rise for the $BTC price back to the top of the channel for a third touchpoint that would make this pattern fully valid. On the other hand, the bottom of the channel is the breakdown zone. If a confirmed breakdown takes place here there could be quite some way to fall.
A third step higher now in play?
Source: TradingView
Out into the daily time frame the ascending channel thesis does look like a real possibility. The parallel channels make steps up to the next level of the ascending channel. In fact, it rather looks like the next major step up, the third one, may have just begun. The daily Stochastic RSI indicators are possibly just about to pass the key 20.00 level where the beginning of upside price momentum is signalled.
If the thesis plays out, the upside target is probably the $94K horizontal resistance level, while if the $BTC price breaks down out of the channel, the downside target would be the low $70K area.
It must be borne in mind that at this point, the ascending channel thesis is purely speculative. That said, with bond yields coming down, the dollar softening, and oil maybe hitting a peak, the setup for this thesis is very supportive.
A rising channel that guides the Bitcoin price out of the bear market
Source: TradingView
Looking at the $BTC price and the ascending channel structure in the weekly time frame, it can perhaps be appreciated how the price is able to reach the critical $97,880 resistance level and confirm the bear market as officially over.
Nevertheless, as already mentioned, this is still speculation, and we don’t know at what point the bears might drag the $BTC price out of the channel. We do have a clue though as to how far down a potential correction might go. If we take the measured move out of the channel, this is roughly equivalent to an $11K corrective dip.
If we look at the bottom of the chart, the Stochastic RSI indicators are in the position of a rollover. Could they find support at the 80.00 level and bounce back up?
The Relative Strength Index looks a lot more healthy for the $BTC price. A 2.5-year trendline break to the upside suggests that there may be more fuel in the Bitcoin tank. We will see what develops.
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