Bitcoin Rally Continues: How Much Longer Can It Last?

Probably on the back of the benevolent US CPI figures that were released on Tuesday, the Bitcoin price had a good day, rising 4.5%. Can the rally continue and make that all-important higher high, or is $BTC getting close to a roll-over that will take it lower again?

Bitcoin price roll-over or continuance to $66K?

Source: TradingView

As can be seen in the 4-hour time frame, the $BTC price may already be rolling over. Having just pierced $65,000 and fallen back, it now remains to be seen if the price will hold $64,500 as support, or whether it will fall back through this level.

If the price falls back down, the top of the falling wedge is only just below. If this fails and the price descends back inside, the latest price action will have just been a fake-out and the bulls will have to go back to the drawing board.

If however, the $64,500 level is flipped into support, the $BTC rally can continue, with the major $66,000 horizontal resistance the next target, and $67,250 the higher high that would really put a significant dent in the overall downtrend. 

Early emergence from wedge pattern

Source: TradingView

The daily time frame illustrates how the $BTC price has poked its head out of the falling wedge. This has happened rather early, given that the price would normally stay within such a wedge until at least two thirds of the way through its extension, and unless this is indeed a fake-out, it is to be wondered if the wedge is a trustworthy pattern here.

At the bottom of the chart, the Relative Strength Index (RSI) is showing the opposite of the price action, which is a potential rising wedge. The first half of this wedge describes bullish divergence, which could be in the process of playing out now. The problem with the rising wedge is that it stands a better chance of breaking to the downside. However, that may be further down the line, and the $BTC price may have moved clear to the upside by then.

Divergence to take $BTC price to $83K?

Source: TradingView

The weekly view demonstrates that the $BTC price is standing proud above the bull market trendline and the 200-week SMA. Also, if one takes a trendline from the top of the last big high at the top of the previous bear flag, it can be seen that the price has moved though this and is currently holding it as support.

At the bottom of the chart, the RSI needs to be watched once again. An even bigger divergence is at play here. The indicator line is moving up in a channel. If the indicator line reaches the top of the channel this would likely signify that a respectable rally was taking place. Could it succeed in making a higher high at around $83K?

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.