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In spite of the relatively benign US inflation figures released on Wednesday, Bitcoin dipped more than $1,000 on the news, falling back to the bear market trendline. Has this put paid to the current rally or is it just a bump on the road?
Bear market trendline stops the slide
Source: TradingView
One thing the bears did achieve when they slammed the $BTC price down from the $64,450 horizontal resistance is that they put a sizable dent into the upward trajectory. The bulls really need to take full advantage of this current upside move given that a potential breakout of the key $65,600 resistance is the prize.
The good news for the bulls is that the recent dump did not take out the last lower low, and the bear market trendline was adequate support to stop the slide.
The latest upward impulse was based on this major trendline and where it met a small downward trendline. Now the $BTC price is approaching the next trendline. Once through here the way is open for the price to return to the key overhead resistance.
Bull market trendline can apply the brake
Source: TradingView
The daily time frame shows how the $BTC price has been sliding down the bear market trendline since it broke through. It can also be seen that there is one very big brake that the price may soon come up against, and that is the bull market trendline. As this trendline inexorably climbs, the bear market trendline does the same but in the opposite direction. The price has already crossed through the bear trendline so it might be expected that the bull trendline wins out. However, this still remains to be seen.
In the RSI, the indicator line has dropped below the trendline and has confirmed the breakdown. That said, the indicator line has just made a higher low. As long as this line can continue to trend up, the bulls should have the edge in the price action.
Is the bottom in?
Source: TradingView
When looking at the entirety of these last bull and bear markets it looks more likely that this bear market has finished than that it still has further down to go. The bull trendline is a very strong one, given that it goes all the way back to the very beginning of the bull market, back in late 2022. In opposition to this, the bear market only stretches back less than 9 months - that is if the bottom was indeed a little under $58K. Could it be an issue that the last two bear markets lasted just over a year and that this one is too early? Probably not. There is always the possibility that there is one more big dip to the downside that takes out the previous low, but as things stand, the bull market trendline is holding and $BTC looks to be emerging from bottoming price action. There is probably plenty of chop, up, down, and sideways to come, but it does rather look like the bottom is in.
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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