After reaching a local high of around $82,800, the $BTC price has suffered a 4.25% fall, losing the major $80,600 horizontal support level, and pulling back to the top of the bear flag which was strong enough support to stop the rot. As Bitcoin continues its bounce, could $85,000 be the next higher target?
Short-term momentum indicators signaling a bounce?
Although the latest pullback may have made many investors nervous, especially after breaking out beyond critical resistance, it can probably be put down to a healthy retracement, particularly given that the $BTC price had become quite overbought.
The price did fall back below the crucial $80,600 horizontal support level, making it resistance again, and the price fell out of the small ascending channel. That said, the top trendline of the bear flag was strong enough to hold the price up. A bounce has since occurred, and now that all the short-term momentum indicators have reset, the bulls will be hoping to push for a higher high.
Will price be rejected from 200-day SMA?
Source: TradingView
The daily chart shows us that the $BTC price is at a very delicate stage. The bulls will be hoping that the bear flag support holds and that they can push the price back above the major resistance.
Now very close to the price is the descending 200-day simple moving average (SMA). The bears will be looking for a major rejection from this very important average that will tip the price back into the bear flag and send it crashing back to the bottom.
At the bottom of the chart is the Relative Strength Index (RSI). This is illustrating another very important battle between the bulls and the bears. The descending trendline has kept the indicator line below for almost 20 months so far, with several tests of this trendline over that period. For the first time the indicator line may be about to get above, breaking the trendline. Expect some fireworks if it is successful.
Critical last 3 days of the week
Source: TradingView
While there is still the rest of Friday and the weekend to go, the bulls will need to beware of a weekly candle that closes below the $80K resistance, and also below the top trendline of the bear flag. In fact, this could even be disastrous.
As things stand, this does look like a possibility, although with short-term momentum indicators all having reset, the probabilities might still be favouring the bulls.
Another factor to keep an eye on are the Stochastic indicators in this weekly time frame. They have reached the top, but as seen the previous time they got here, they were able to bounce and keep the rally going.
This week’s close is going to be very interesting. Unless the bulls push the price higher, with perhaps some good news from the Middle East conflict, things could suddenly become very bearish again.
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.
Credit: Source link
