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A small rally has seen the Bitcoin price climb 3% over the weekend. However, key resistance may have put paid to any further upside in the short term. Is Bitcoin about to break down, or can the bulls still stage a rally and take the market by surprise?
Rejection from $65,600 resistance a done deal?
Source: TradingView
Perhaps the first thing to bear in mind when discussing whether the $BTC price is rising or falling, is that the crypto market looks weak in general. While the price of Bitcoin has indeed risen significantly since the bear market low just below $58K, the rally has not been a strong one. Instead the price has meandered slowly to the upside, and even when breaking through the top of the channel and the key $66K resistance, there was very little momentum that would have enabled significant escape velocity to the upside.
As things stand on Monday, the $BTC price rather looks like it is testing and confirming the underside of the trendline that guided the rally up from the bottom. If this is the case, watch out for a pullback, and quite possibly another lower low.
The only factor in the bulls’ favour is that the price is above the descending channel. Perhaps the price may meander down keeping above the channel until momentum changes, enabling the bulls to have another go at breaking through the key resistance level.
Sideways price action between key support/resistance levels
Source: TradingView
The daily chart reveals that second break above the descending channel. Will the $BTC price hold above now? Even if it doesn’t, a sideways period of price action between the $66K major resistance and the top of the bull market trendline could continue to take place.
The Stochastic RSI indicator lines in this time frame may be about to cross back up, and in the RSI at the bottom of the chart, the indicator line has managed to stay within the confines of the rising wedge pattern. A break to the downside of this wedge would probably spell the next more extended period of a correction. While as long as the indicator line stays inside, there is the chance of a breakout and a rally.
8th straight week of candle closes below $66K
Source: TradingView
The most notable thing in this time frame is that yet again the weekly candle failed to get above the $66K horizontal resistance before the weekly close. This makes 8 consecutive weekly candle closes below.
Nevertheless, on the other side of the coin, the $BTC price has managed to stay above the 200-week SMA and the bull market trendline. As the price is funnelled into the decreasing gap between these two and the $66K horizontal resistance level, one or the other is going to have to break, and this could take a while longer to play out.
In the Middle East, a lull in the fighting has caused the oil price to fall heavily. If the lull becomes a return to negotiations, could this give the U.S. stock market some much needed relief which could in turn translate to a healthier Bitcoin price?
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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