After hitting $76K, the $BTC price looked as though it was holding firm around $74K. However, with buyers exhausted after eight green days and a $10,000 gain to the upside, a rejection from the top of the bear flag was always going to be the most probable outcome. A rapid descent to $69K followed, and it now remains to be seen whether this major level will hold and provide the base for a bounce.
$BTC price holding for a bounce?
Source: TradingView
The short-term chart shows the rapid descent down to support, which has so far followed a similar path to the last time the $BTC price was rejected from the top of the bear flag. It just remains to be seen whether the price will hold this time at support, or if it will fall through.
The sharp fall has enabled the Stochastic RSI to reset, and the same is true in the 8-hour and 12-hour time frames, so a bounce, whether it be from the current support level, or the major $69K horizontal level, is quite a likely scenario. A minor trendline can also provide support at the lower of these levels.
One more attempt to break the top of the bear flag?
Source: TradingView
The daily time frame picture does suggest that a bounce could take place from the $69K-$70K horizontal level. As well as from the support and minor trendline, the RSI indicator line can probably bounce from the bottom of the ascending channel. This could mean that there might be one more attempt to break through the top of the bear flag.
The next upward surge may have to deal with the top trendline of the huge descending channel, just as was the case when the $BTC price was rejected at the top of the first bear flag.
Bear market ends in June?
Source: TradingView
The 2-week chart reveals with clarity how bearish divergence is playing out just like it did for the last bull/bear cycle. Just as was the case back then, surges higher in the price action were matched with divergent lower lows in the Stochastic RSI and the RSI. What the price is experiencing now is the playing out of this divergence – or in other words, the entirety of this current bear market.
Is there one more drop lower left in this bear market? Quite possibly, although the macro indicators have hit bottoms. Yes, they could bounce along the bottom for a period of time, and this has been the case in the RSI for the last two bear markets. That said, the RSI indicator in this 2-week time frame did hit the lowest point in history recently.
If one takes the Stochastic RSI into account, the 2017 bear market saw the indicator lines spend around a year beneath the dashed 20.00 level. In 2021 this was reduced to around 10 months. If we say that this bear market reduces to 8 months, that would mean the indicator lines rising above the 20.00 level at some point in June, and perhaps an end to the bear market?
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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