So far unable to get through the $64K horizontal resistance level, the $BTC price may have ended its rally of the last week and is starting to roll over. Could this just be a pause to enable the bulls to catch their breath and consolidate, or could a decent pullback be in the early stages?
Sideways consolidation before next move
Source: TradingView
As can be seen in the short-term time frame above, the $BTC price has not been able to get above the $64K horizontal resistance level and this has led to some sideways chopping up and down until the price goes one way or the other.
So far, the $BTC price has found good support on top of the 200 simple moving average (SMA). Below this is the bull market trendline and the top of the falling wedge – also, decent support levels.
Shorter term momentum indicators are starting to come back down, so if Bitcoin can stay in this relatively tight sideways consolidation range for the next few days, the rally could possibly then continue.
Breakout lacks volume
Source: TradingView
The daily time frame shows us that the breakout from the falling wedge did not have much in the way of volume behind it and this is probably why the $BTC price looks quite lackluster now. That said, as long as this consolidation period does not take the price back down to the lows, it’s a healthy thing to be taking place.
If the price goes sideways between the $64K resistance and the rising bull market trendline, it probably won’t be too long before one of these fails, and the price can either climb higher or fall back down.
Bullish divergence still a factor
Source: TradingView
In the weekly time frame it can be observed that the $BTC price has come down to the bull market trendline. If a bounce happens here, bullish divergence could play out. The Stochastic RSI, as well as the RSI, are both rising, while the price action has fallen.
However, if the price continues to fall, the Stochastic RSI indicators could then come down to the bottom and negate the divergence. That said, it will take a lot more than this to nullify the divergence for the RSI.
Therefore, there is a major factor waiting in the background that could be the one to spark the end of this bear market and the beginning of the next bull market. It’s probably just a matter of ‘when’ this may play out.
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.
Be the first to comment