Over the last five days the Bitcoin ($BTC) price has generally trended downward. Currently holding just above $95,000, will this decline continue, or could we see a big recovery going into the end of this year?
The king of cryptocurrencies has been very much in sideways and downward mode over the last few days. In fact, the drop in price that took place over last Thursday and Friday took $BTC down to a price of $92,700, which was first seen more than a month ago.
Since that time, $BTC has followed an upward tilting channel, dropping out of it during the aforementioned price dip. Given that ascending channels generally do break to the downside, Bitcoin’s trajectory over these last few weeks has been perfectly normal.
Now that a bearish weekend is behind us, and the short term momentum indicators have reset, it could be that some green candles start to reverse this last downward trend.
One factor that could accelerate Monday’s positive start is the possibility that MicroStrategy could announce its next BTC purchase. According to Michael Saylor’s MicroStrategy Portfolio Tracker, the green dots that record all purchases have appeared every Monday since 11 November. It would therefore be no surprise to hear of a new purchase later today.
Source: TradingView
The 4-hour chart shows the $BTC trajectory over recent weeks. Given that Monday has dawned brightly for $BTC, with the price up 0.80% so far, it may be that the measured move out of the channel does not take place – at least not yet.
It can also be seen that the ascending trendline, that goes all the way back to the 2021 bull market double top, is being respected. It has acted as strong support so far, and this may well continue.
If this last correctional phase is indeed over, the next targets for $BTC are $98,000, $100,000, and $102,000, which besides being good support/resistance levels, are also Fibonacci levels. This would take $BTC back inside the ascending channel. If the top of this channel can be attained once again, a new all-time high would be the prize.
Source: TradingView
Much information can be gleaned from the above 2-week chart. First of all, the ascending trendline that bisects the double top of the 2021 bull market can be clearly seen. The support that this line is giving to the current price can also be noted.
Looking at the entirety of the descent into the bear market from that last top in 2021, and the consequent ascent into the current bull market, shows that a cup and handle chart pattern developed, with the handle being formed by the long 8-month bull flag. The price sprang upwards from that $69,000 base and is still potentially on the way to its measured move of $120,000.
The bottom of the chart contains the Relative Strength Indicator (RSI), which signals oversold or overbought conditions. This indicator has rolled over due to the recent corrective impulse, and this is currently signalling a lower low compared to the previous two tops that can be seen on the chart.
However, there is a good chance that the 70.00 level could act as support. If the indicator line is showing below this level at the weekly close, then this dip is likely to continue.
Looking much further out, if this indicator line does not get above the previous high of 87.00, very serious bearish divergence would come into play – probably putting an end to this bull market, and signalling the start of the next 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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