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The Bitcoin price was rejected from the top of its bear flag on Monday, achieving a level of $79,500. The price has now fallen through a trendline it had remained above since the beginning of April. Is this just a normal healthy pullback before a breakout, or is this a sign that the bears are about to take back control?
Supporting trendline gives way
Source: TradingView
Nearly a month of marching up from the bottom of the bear flag to the top could be over. The $BTC price was forced into a narrowing space by the trendline and the bear flag top, and it’s the trendline that appears to have given way. The price fell through and has already been back to test and confirm the breakdown. Will it be down from here?
After a breakdown like this it might be expected that the price descends a lot lower. Be that as it may, the last push to the top by the bulls did in fact make a very slight higher high. If this current bearish phase does not push the price below the major $74,000 support level, this current medium term uptrend would still be intact.
One thing to note is that the last higher high did in fact leave behind a small double top formation. The measured move from this double top would take the price down to around $74,500 if it fully played out.
Golden cross about to take place
Source: TradingView
Zooming out into the daily one should note that in this higher time frame the breakdown below the ascending trendline has not been confirmed yet. The current daily candle needs to close below.
One very important piece of information in this chart is that the 50-day simple moving average (SMA) is about to cross back above the 100-day SMA. This is termed as a “golden cross”, and is a bullish signal if accompanied by increasing volume, and as long as the price action stays above both moving averages.
Big upside price momentum in 2-week chart
Source: TradingView
The weekly chart for the $BTC price shows the Stochastic RSI approaching the top of its range, therefore, from the bulls’ perspective it’s good to see that in the 2-week chart the Stochastic RSI indicator lines are just crossing up through the 20.00 level, signalling big upside price momentum. Even in the monthly time frame, the indicators are at the bottom and are in the process of crossing up.
A huge wave of bullish momentum is still buoying the price higher. Can it force the price up through the top of the bear flag and on to $90,000?
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.
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