A short squeeze played out on Monday to the tune of $411 million in liquidations over the last 24 hours, helping the $BTC price to hit over $94,000 before finally being rejected. Is the next down leg underway, or could this be a short pause before breaking higher?
$94,000 resistance: rejection or further upside?
Source: TradingView
The last thrust by the Bitcoin bulls just managed to post a higher high, even if it was by the slimmest of margins. It now remains to be seen if the $BTC price will start to reverse now and return to retest the $90,000, or even the $88,000 horizontal supports.
As can be noted in the Stochastic RSI, the indicator lines have dipped very quickly. This could mean that a potential reversal may not come down too far. The short trendline the price is currently following may not hold for long. Therefore once the price comes down through, it could either stop at the $90,400, or the $88,000 horizontal support levels. The rising lower trendline of the bear flag could be another target.
The longer the price takes to meander down and sideways, the more time there will be for the shorter term Stochastic RSIs to reset. This could potentially result in more upside momentum once the price turns back around again.
Is there a chance that the $BTC price could continue to go up from here and definitively break the $94,000 resistance? Yes, this is a possibility. If this resistance is broken and confirmed above, the route to $100,000 looks relatively straight forward. That said, with the bear flag top also around this level, a strong rejection would be probable.
Retest of an ascending triangle?
Source: TradingView
Moving out into the daily time frame it can be observed that a potential ascending triangle could be forming. If the $BTC price comes back to the bottom of the triangle and rises again, on the balance of probabilities it could then break out, with a measured move to $108,700. This would also nullify the bear flag.
This next move down will be watched with eager anticipation. The bottom of the triangle is also likely to be bolstered by the major ascending trendline, and the $90,000 horizontal support level. A bounce would seem likely.
Measured move to key structural level
Source: TradingView
Zooming further out into the weekly time frame one’s eyes are drawn to the target of the measured move out of the ascending triangle. This is pretty much to the $108,000 horizontal resistance, which also happens to be a major price structure line, with the top of the previous falling wedge holding it as resistance, and with a decent part of the current falling wedge holding it as support.
If the ascending triangle thesis plays out, the price would be knocking on the door of the last big structural level before the all-time high. If the $BTC price was rejected from there, this would have been nothing more than a bear market rally. However, if the price was able to break through, a retest of the 8-year trendline would be beckoning.
One note of caution: it’s never a good thing to get too far ahead of oneself in trading, and a good dose of pragmatism is always needed. Be ready to change your view if the chart moves against you.
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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