Nothing stops this train! Bitcoin is holding nicely above what is now major support at $80,600, and the next surge could be in the development stage. As the $BTC price continues to disappoint the shorts, could $85,000 be a realistic target?
$BTC price retests support and heads higher
Source: TradingView
A huge 27% up from the bottom of the bear flag, equal to nearly $18,000, and the $BTC price is still showing no signs of slowing down. The small ascending channel that guided the price out of the bear flag is still doing its job. After hitting the top of this channel with an $82,800 local high, the price has retested the bottom, which aligns with the major horizontal support, and is now heading higher.
With the 4-hour Stochastic RSI indicators having reset perfectly at the bottom of their range, the $BTC price could be good for the next upside leg of this journey – fingers crossed that the news coming out of the US/Iran conflict does not take a turn for the worse.
Daily RSI vs 200-day SMA
Source: TradingView
When surveying the daily time frame there are two major factors, besides the breakout of the bear flag and major resistance, that tell an important story – one bullish and one bearish.
The bullish story, and it really is bullish, is that the RSI indicator line has pushed above a descending trendline that has been respected all the way back to November 2024. If the $BTC price can take hold above this trendline, confirming the break, this is a very strong signal for a continuation of this rally.
The bearish tale has as its antagonist the 200-day simple moving average (SMA). This is likely to impede the price from going higher, or at least provide a strong barrier that the bulls will need to battle their way through.
That said, if the RSI indicator line is still above the trendline at the end of this week, this is the bullish signal that can win out over the 200-day SMA.
Two bear market trendlines
Source: TradingView
It can be seen that the $80,600 horizontal level is still a resistance level in this very high 2-week time frame. The end of three more days will tell us if the current candle for the $BTC price is able to close above and flip this level into support, setting the scene for a potential huge rally.
Especially when looking at the very high time frame, simplicity is often the best strategy for technical analysis. Just one descending trendline can tell the major part of the directional story.
Back in the last bear market, which lasted through the best part of 2022, once the bear market trendline was broken, the bull market was able to begin. It does have to be acknowledged though that in that particular bear market there was a retest and confirmation of the trendline breakout, and this did take the price down a further 25%.
Zoom forward to today and we can see that not only has the bear market trendline been broken, but a big rally occurred as soon as the break was made. Could there still be a retest of the trendline? This is not off the table. If the current rally fails and there is a crash, a 25% fall could end more or less exactly at a retest of the trendline. This is a scenario that cannot be ignored.
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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