After breaking out of a descending channel and up through key resistance, the Bitcoin price is now returning to test the key $66K area. Will it make this level support, or could this be a bull trap?
$BTC price returns to confirm key support
Source: TradingView
Here in the 4-hour time frame it can be seen that the $BTC price is probably coming back to test the $65,600 horizontal level as support. This is after breaking through this level and hitting a new local high of $67,900.
The question still remains though whether the price will indeed stop and base itself on the horizontal support level, or if it will fall back through in order to retest the top of the descending channel. Given that $65,600 was a tough level to break above, it would be imagined that it would hold the price up, although a quick wick down to the top of the channel also remains a possibility.
$BTC price to continue to rally to $73K?
Source: TradingView
In the daily chart it can be observed that the $BTC price has indeed come down to touch the horizontal level that could now be confirmed as support. As long as this level does hold, it’s probably just a matter of time before the bulls get their act together again and a bounce ensues.
In the chart, a potential path has been drawn which might give a rough estimate of where the price is going from here, and that’s more likely to be to the upside. $73,440 is the target of the measured move, where a resistance level coincides more or less perfectly.
Don’t count your chickens (yet)
Source: TradingView
Moving out a lot further into the weekly time frame, a common idiom is probably appropriate advice here: “Don’t count your chickens”. While all looks pretty good in the shorter term time frames, here in the weekly, another few days are going to be required before seeing whether the new weekly candle will close above the channel and also above what is still horizontal resistance at $66K.
Yes, the scene could be set for a stunning breakout and rally that might completely put the bear market behind us, but if the bulls get cold feet in the next few days, and they don’t fully get behind the rally, a fakeout and a roll-over could extend the bear market out, at least until Q4 this year.
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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