Bitcoin Price Sideways: Higher Highs and Higher Lows Continue

After breaking out last Thursday, the Bitcoin price managed to tag the key overhead resistance at $82,350 before being rejected. This means yet another higher high has been made. After some more consolidation, can the bulls come back and take out the critical macro high at $82,825?

Price structure morphs into ascending channel

Source: TradingView

The 4-hour time frame chart shows us how the price action has morphed from a pennant/wedge structure into a slightly ascending channel. Could this be the structure that finally allows the $BTC price to break through the key overhead resistance, making a macro higher high as it does so?

As things stand, the price has just fallen below the channel midpoint, so this will become resistance. Also, the price may be about to flip the $79,520 back into resistance. There is a level of support just below at $78,530 which could catch the downward movement, or, what was the top of the wedge (faint dotted line) and now the bottom of the channel could be where the price goes in the short term, either for a bounce, or a potentially bigger breakdown.

On the other hand, if the bulls can maintain their dominance, the 4-hour Stochastic RSI indicator lines can signal renewed upward price momentum once they hit bottom and start moving up again, leading to another assault on that all-important higher high.

Can price action still be interpreted as a bull flag?

Source: TradingView

Seen in the daily time frame, the structure of a rising channel on top of a huge rally is perhaps not the best one for the promise of a continuation of that rally. That said, superimposing another channel (thicker purple parallel lines) over the top of the original, we do have the slight downward slant needed for a bull flag, which is the perfect continuation pattern for the next potential leg higher. If this is indeed the correct interpretation of the price action, an explosive sortie from the top of this channel could be what to expect next if the breakout occurs.

It might seem unlikely at this point, but if this bull flag does play out, the measured move would be to around $95,400 - not far short of the $97,900 needed to officially change the bear trend back to the bull.

The bulls still hold sway

Source: TradingView

Zooming right out into the weekly time frame we can see the entirety of the bear market and this wonderful towering recovery candle. However, it must also be noted that the $BTC price is not out of the fire yet. If that all-important higher high is not made, the price can just roll over and we could even see another lower low as the downward trend continues.

Be that as it may, this is not the more probable outcome. After such a huge breakout, the momentum is to the upside, even if there is a downward wave to come first.

The bears might point to the Stochastic RSI and say that this tremendous upside momentum signal has come to an end, given that the indicator lines look as though they are starting to roll over. This could be the case, but the 80.00 level can act as support, as it has done before, allowing the upside momentum to return after a relatively short hiatus. Obviously though, this still remains to be seen.

The expected thesis is that the bull flag plays out. If it doesn’t, a dip down to one of the support levels could be next, to then be followed by a resumption of the upside movement. The bulls still hold sway here, and it would perhaps take a correction that goes below $69K for any kind of concern to start playing on the minds of the bulls.

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.