The Bitcoin price has now lost more than $7,000 in this latest corrective phase. Currently having dipped under $91,000, the question remains whether the price will continue this bearish price action, or if a bullish wave is just around the corner.
Probabilities Favor a Bounce from Current Levels
As can be observed in the 4-hour chart, the BTC price is currently situated at a crucial stage. It has reached the bottom of the ascending triangle formation, which also coincides with the $90,000 horizontal support level not far below it. A decisive fall through this level could potentially lead the price back down to the major trendline.
If such a scenario were to unfold, it would signify a failure of the ascending triangle pattern. However, it is worth noting that a fakeout to the upside has already occurred, suggesting that a similar move to the downside might serve to balance the market dynamics.
The prevailing probabilities indicate that a bounce is likely to occur from the current position, given the presence of strong support levels underneath. Furthermore, the Stochastic RSI indicators have reached their bottom, increasing the possibility of a move back towards the upper range.
Identifying Very Strong Support
The daily time frame provides a clear illustration of the robustness of the horizontal support line at $90,400, indicated by the orange line. This level benefits not only from the bottom of the ascending triangle but also from the support provided by the 50-day Simple Moving Average (SMA), represented by the blue line.
When factoring in that the daily Stochastic RSI indicators are approaching their bottom and may soon trend upwards, it reinforces the likelihood of a bounce and the commencement of the next upward price movement for the bulls.
The sole element in the daily chart that might present a dissenting view is the Relative Strength Index (RSI). The indicator line has fallen below its uptrend line; however, there is still sufficient time before the daily close for this trendline to potentially reverse.
Ascending Triangle: Key to Breaking the $94,500 Resistance
The higher time frame charts offer a comprehensive view of the market, revealing the overarching trends rather than isolated movements seen in lower time frames.
The strong orange horizontal support line is unlikely to be breached easily. Positioned just below this is the major trendline, with the 100-week SMA situated further below (not depicted in the immediate chart).
On the upside, the $94,500 horizontal resistance level presents a significant challenge. The ascending triangle pattern will be instrumental in driving the price through this barrier. Based on the dimensions of the triangle, this breakout could potentially occur within the current week or the next.
At the lower section of the chart, the Stochastic RSI indicators must maintain their upward trajectory and not reverse. Bulls need to capitalize fully on any upward price momentum. If the BTC price fails to surpass the previous key resistance level of $108,000 by the time the Stochastic RSI indicators reach their upper limit, the anticipated rally might ultimately prove unsuccessful.
The measured move projected from the ascending triangle points directly towards the critical $108,000 resistance level. The possibility exists that a single substantial green candle could propel the BTC price directly to this target.