The Bitcoin price touched $74K on Wednesday before falling back. It now remains to be seen whether there will be a reversal and a period of consolidation, or whether the strength behind this rally can push the price higher on Thursday.

Continue higher, or consolidation pause?

Source: TradingView

When the $BTC price escaped out of the month-long descending channel it entered into another channel - this time an ascending one. It broke out of this and the price managed to touch $74,000 before falling back. The ascending channel has been reentered, so now the price has to break back out, plus push through the $72,700 resistance level again.

Can the bulls achieve this? Yes, although with the price having climbed 9% on Wednesday, the chances are that the bulls will need a reversal period so that the momentum indicators can reset.

With that in mind, a dip to the bottom of the small ascending channel, and a potential retest of the major $69,000 level could be on the cards in the near future.

Huge descending channel, but another potential bear flag

Source: TradingView

In the daily chart it can be seen that the $BTC price is likely traversing within a huge descending channel. Price normally breaks out to the top of these patterns so looking further out, this is bullish.

Nonetheless, while the breakout from another much smaller descending channel is in the process of playing out to the upside, it has to be taken into account that the price action could be forming another large bear flag. Could the price be about to work itself across to the limit of the huge descending channel before pivoting and coming down to crash through the bottom of this potential bear flag? 

At this stage it is speculation. There is no bear flag until the price reaches the potential upper limit and brings it into play. Also, the remedy for a possible bear flag is for the price to break out of the massive descending channel. 

One more thing. Is the descending channel valid? What would perhaps have been one last touch point didn’t actually occur. The price fell to $60,000, and would have needed to fall a little more in order to test the lower boundary of the channel. 

While these are all factors to consider, a note of caution is that if the second bear flag thesis does play out, the full measured move could take the $BTC price down to $48,000. Could that be a potential bear market bottom?

Rally targets

Source: TradingView

Much further out in the weekly time frame things are looking quite bullish as long as this current green candle can maintain a decent length. The target for this rally is the $85,000 resistance level, with an interim target of the $80,000 resistance. 

Interestingly, if it takes at least a couple of weeks to hit the $85K target, the price would have broken out of the huge descending channel. Could this potential breakout provide the momentum to crash through the $85K - $86K resistance?

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.