The major horizontal resistance at $69K has become a wall that Bitcoin must break in order to pull out of its nose dive into a bear market. After a solid rejection of this level on Wednesday, what’s next for the $BTC price?
$BTC price rejected at $69K
Source: TradingView
The $BTC price remains in the descending channel after the bulls failed to confirm beyond the top of the channel and the major horizontal resistance at $69,000. There is still the possibility of another attempt by the bulls at this level, but given that momentum indicators are now topping out, it would seem a decent probability that the price will fall back and either test the $65,000, or the $63,000 support, with the possibility of coming all the way down to the $60,000 level.
What the bulls will be hoping for is that this next potential pullback will be a shallower affair. $65,000 would probably be welcomed, as this would be a higher low to add to the higher high that has just been achieved.
One other possible scenario is that the price action is currently forming a small bull flag. Could this play out and send the price through the major resistance and up to $74K to $75K?
Can bull flag setup provide the impetus to break $69K?
Source: TradingView
Zooming further out into the daily time frame reveals that we have a bigger bull flag setup. This is unusual in that bull flags are normally found at the top of rallies rather than the bottom of them. That said, a recovery candle climbed a good way back up that sharp drop down, and the bull flag started to form from there.
An unusual bull flag it might be, but the bulls will certainly take it. It might also supply the necessary impetus on breakout that takes the $BTC price back through the $69,000 resistance level. The measured move for that potential breakout also takes the price to around $75,000.
Crucial candle close in the weekly time frame
Source: TradingView
The collection of weekly candles with long bottoming tails underneath them is growing. This would suggest that buying is coming in at this level. The current weekly candle is very important in this respect, and so if this candle can also close with a decent sized tail beneath it, the bottoming picture becomes clearer and gains more credibility.
The weekly Stochastic RSI indicators have now crossed back up. This will need to be confirmed at close of play on Sunday, but if so, this puts the indicators back on the path towards signalling upside price momentum when they cross the 20.00 level.
Things are also starting to look positive for the Relative Strength Index. Here, the indicator line is almost at the same level for the previous bear market bottom, and if one zooms in, it can be seen that the indicator line is just beginning to incline back to the upside.
Of course, none of this will come to pass if the current weekly candle closes back in the low 60K area. In fact, this could probably be the signal for the next leg down. Keep an eye on this candle over the next few days.
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.