Following a period where the Bitcoin price appeared poised for an upward movement after retesting the $94,500 breakout level, the price experienced a decline late on Sunday, falling to test $92,000 as support. The early hours of Monday have seen a recovery from this point. The price may now ascend back towards $94,500, a level that could either serve to confirm a breakdown or provide an opportunity to break through once more, validating the initial move as a potential fakeout.
Approaching the $94,500 Mark: A Crucial Juncture
The 4-hour chart for Bitcoin ($BTC) indicates a strong upward bounce in the early hours of Monday. The horizontal resistance level situated at $93,000 is on the verge of being breached. Should this occur successfully, it would clear the path for a return to the significant $94,500 level.
Upon reaching this key level, a critical battle is anticipated. If the bullish momentum falters and the price is decisively rejected from this level, it could potentially lead to a significant drop, testing the lower boundary of the ascending triangle pattern, the major ascending trendline, and the $90,000 horizontal support. This scenario would represent a substantial downward movement.
Considering the current market dynamics, the likelihood of such a rejection might be considered less probable. Short-term momentum indicators are resetting at their lower thresholds, suggesting that upward momentum is more likely to prevail than downward pressure. However, this does not diminish the potential for a challenging struggle for bulls to reclaim the $94,500 level.
50-day and 100-day SMAs: Shifting Roles of Support and Resistance
Observing the daily time frame provides a clearer perspective on how the Bitcoin price ($BTC) fluctuated within the ascending triangle before its initial breakout and the subsequent re-entry. The 50-day Simple Moving Average (SMA) is currently acting as a support beneath the price. Conversely, the 100-day SMA appears to be exerting resistance. A notable development would be if these two moving averages converge, and the 50-day SMA crosses back above the 100-day SMA, which could signal a continuation of the current rally.
Weekly Time Frame: Ascending Triangle Breakout Still Undetermined
From the perspective of the weekly time frame, Bitcoin ($BTC) has not yet achieved a decisive breakout from the ascending triangle, as the candle body from the previous week closed within the pattern. The strong horizontal resistance at $94,500 remains unconquered on the weekly chart. If this situation does not change by the conclusion of the current week or the next, there is a possibility of a significant breakdown.
At the lower section of the chart, the Stochastic RSI indicators are positioned favorably to signal robust upside price momentum. However, if this momentum fails to materialize and the indicators reverse direction and decline, the subsequent weeks could prove challenging for investors.
Despite these concerns, the overall trend remains upward. Until the price decisively falls below the major supporting trendline and confirms this move on a higher time frame, the bull market is considered to be intact.