Bitcoin has a good chart setup for a breakout. However, shorter term momentum indicators are still in overbought territory so the breakout might not be for a while. This week or next week for the most opportune time?
$BTC price forms a small bull flag
Source: TradingView
The 4-hour chart for $BTC is looking quite promising. The price touched the bottom of the descending channel, which tallied with the $63,000 support level, and from there it rose fairly sharply, only to be stymied by the top of the channel and the major $69,000 resistance level.
Since then the price has meandered sideways, forming a small bull flag as it chopped back and forth. It can be seen that the price is currently at the top of that bull flag, and also up against the $68,000 resistance level. If it breaks through, there is still the $69,000 major level together with the top of the channel to break out of.
If the price is rejected, there is still room below in the small bull flag for $BTC to come back to around $66,000 without breaking the pattern.
It can be seen in the 4-hour Stochastic RSI that the indicator lines are coming back down. That said, they are at the top still for the 8-hour, 12-hour, and daily time frames, perhaps signalling that the opportune time for a breakout is either now or in a few days time, as the indicator lines could be about to roll over.
200-day SMA inclines further to the downside
Source: TradingView
The daily time frame chart includes the 200-day simple moving average (SMA). This is to show how this moving average is really starting to roll over and incline more sharply to the downside. If one takes into account that this is the first time in this market cycle that this average has inclined downward to this extent, it is perhaps signaling another leg down in the $BTC price. That said, it is a lagging indicator, so one has to be wary about drawing too much from it.
High time frame closes this weekend
Source: TradingView
The 2-week chart for the $BTC price illustrates that there is either the possibility of a major breakout, or the bottom forming is going to continue.
Two nice length candle tails suggest that bulls are buying the dip. If the current 2-week candle can close above the major resistance level this would be ultra bullish, and it would be likely that the price would climb from there.
On the other hand, if the close is below, there could be a lot longer to go in this bottom forming phase. There would also be a chance that the price could fall to a much lower level.
The Stochastic RSI at the bottom of the chart reveals that the indicator lines are bottoming once again. A cross back up may signal that the bulls could be taking their chance to get back above that major resistance.
There is a monthly candle that closes tomorrow. This also needs to be factored in. Will the bulls have enough momentum left to pull this off?
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.