When Bitcoin (BTC) made its all-time high on Monday of just over $126,000, at the same time the price kissed a multi-year trendline that stretches from the December 2017 bull market top. Will there be a rejection from here, or will $BTC power through on its way to this bull market high?
$BTC all-time high is the top for now
Source: TradingView
The 4-hour time frame for $BTC shows how the price just kissed the multi-year ascending trendline before coming back down. It remains to be seen now whether this is a solid rejection and if the price will fall to horizontal support, or whether this will be a period of testing the ascending trendline before breaking through and confirming on the other side.
Below the price is the minor ascending trendline which could act as support, or the horizontal support levels just below this. There is also the possibility that the price could even come back to the top of the descending channel, although with all the bullish sentiment in the market right now this is less of a probability.
At the bottom of the chart, the Stochastic RSI has its indicator bottoming, while in the Relative Strength Index just below, a rolling over of the indicator line is plain to see. This said, there is good support at the 50.00 level for a bounce back up.
A potential bullish pattern for $BTC
Source: TradingView
The daily time frame throws up an intriguing possibility of an inverse head and shoulders pattern. This is based along the multi-year ascending trendline, and if it played out, could provide the impetus for the $BTC price to push through the trendline and go on to a much higher target. Of course, at this stage, this is all totally speculative, and would require a right shoulder to form in order to complete the pattern. That said, some sort of reversal might be expected to take place from the big ascending trendline, so could this turn into the right shoulder?
At the bottom of the chart, the Stochastic RSI plays into this thesis, showing that the indicator lines are just about to cross down. If they came down to the 80.00 level and bounced from there, this would likely provide enough downside for that right shoulder to form.
A measured move for this bullish inverse head and shoulders pattern would be to around $145,000.
A breakout of a 7-year trendline?
Source: TradingView
The weekly time frame really helps to portray the multi-year ascending trendline and reveal its importance for the $BTC price going forward. Will there be some kind of pullback from this trendline, or could the bulls just use the current very bullish market sentiment to power the price on through.
If the pullback is going to be the likely scenario, the horizontal support at $119,700 could be the target. On the other hand, if the bulls manage to keep this current bullish momentum going, a first breakout of this ascending trendline in 7 years could be the most momentous event.
At the bottom of the chart, the weekly Stochastic RSI indicators are angled upwards. This is also the case in the 2-week chart. These are signalling very powerful upside price momentum. Even if the price does come back to the horizontal support, an eventual breakout is more likely than not as things stand. Bitcoin’s biggest move may be about to begin.
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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