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Into the eleventh month of this bear market, the $BTC price has finally managed to break beyond the major bear market trendline. Could this be a signal that the bear market has ended and that Bitcoin is going to rise from here, or is there just going to be more sideways chop as the $BTC price continues to form a bottom?
Not a strong breakout so far
Source: TradingView
The 4-hour time frame chart shows that the bear market and bull market trendlines are very close to meeting just as the $BTC price forced its way through to the upside and beyond the bear market trendline.
However, if traders were expecting fireworks after this breakout, so far they have been disappointed. Volume has continued to remain low, and therefore the $BTC price has not been able to get far from the trendline. Instead, the price has fallen below a small rising trendline and looks to have confirmed this minor breakdown. Some sideways chop may be the order of the next few days.
Indicators signalling a potential end to the upside?
Source: TradingView
The daily chart illustrates that the inverse head and shoulders pattern is still forming. If the $BTC price can reach the neckline at around $66,700, there is still the chance of a breakout.
That being said, the weak performance of the price since it broke beyond the bear market trendline is possibly linked to two indicators that are potentially about to signal a turnaround in this upside momentum.
Firstly, the Stochastic RSI indicator lines are reaching their top limit in this important time frame. Of course, there could still be some sideways chop that keeps the lines above or around the 80.00 level, as happened for the previous rally.
Secondly, and probably more importantly, the indicator line in the RSI has dropped out of the rising wedge pattern and is failing to move back inside. Instead it rather looks as though the indicator line has just come back to confirm the breakdown, probably auguring a possible matching breakdown in the price action.
$65,600 resistance to crack and break, or will it push the price down once again?
Source: TradingView
While the bulls don’t have a particularly strong position right now in the shorter time frames, the weekly draws the eye to the small green bar that has emerged on the other side of the bear market trendline. This has to be very encouraging. Also, the $BTC price is once again above the 200-week SMA.
The Stochastic RSI indicator lines are looking good, with both angled upwards again. The bulls simply must take full advantage of the upside price momentum that this high time frame indicator signals.
The potential cause for concern here is that the previous weekly candle closed below the crucial $65,600 yet again. Is this resistance level going to be a glass pane that will eventually crack and fail after so many knocks upon it? Or could it be the stumbling block that sends the $BTC price down one more time to find a possible lower bottom?
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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