A steep and frightening correction may now have run its course for Bitcoin. A total of 36% down from the all-time high, the $BTC price is holding and consolidating above a major ascending trendline. Is Bitcoin about to startle the market again, but this time in the opposite direction?
Can the bulls hold this bottom
Source: TradingView
The above 4-hour time frame chart for the $BTC price holds the key as to whether Bitcoin has finally put a bottom in, or whether there may still be one last hurrah for the bears.
It’s quite simple. The bulls need to keep the price above the major ascending trendline, or, if it falls below, they need to avoid the price making a lower low.
The current horizontal support may not hold, and if this is to be the case, one would expect to see the price come down to the major trendline again.
That said, the price has recently broken through the descending trendline and has confirmed the breakout. It may just be a matter of time of waiting for the Stochastic RSI indicators to reset at the bottom before the price can really lift off. A small uptrend line is perhaps starting to form (faint dotted line). It will be interesting to see whether the price can bounce off of this.
Fibonacci levels call the bottom
Source: TradingView
The Fibonacci sequence in the daily time frame is very informative. The Fibonacci sequence is drawn from the last local bottom up to the all-time high. This gives predicted support levels. It can be seen that the $BTC price has potentially bottomed on top of the deepest of the fibonacci retracements on the 0.786, at a price of $85,650. The fact that this lines up perfectly with the major ascending trendline makes this a perfect place for a bounce. The accuracy of the 0.618, and the 5.0 Fibonacci levels as resistance lines lends even more support to this bullish-looking set-up.
$80,450 is a horizontal support level and the exact bottom
Source: TradingView
The weekly chart for the $BTC price illustrates very clearly that a bottom has very likely been found. It’s in this high time frame that the $80,000 horizontal support can be seen as a pretty strong level. A candle wick all the way down to retest this support, and a candle body that stayed above the major trendline bears testament to a respect of the price structure.
The Stochastic RSI indicators are at the bottom ready to incline back to the upside. The future probability is that the $BTC price rallies all the way back, past the all-time high, and up to the multi-year ascending trendline, which could be around $130,000 or more. The rest of this bull market will depend on what the price does then.
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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