The Bitcoin price potentially reached a top of $81,250 on Monday. Was this a local top? If so, what are the downside targets? On the other hand, if there is more upside to come, how much further could this monster rally go?
Rally up to $82,350 or breakdown ahead?
Source: TradingView
Looking at the 4-hour time frame chart it can be observed that the $BTC price has had some kind of a consolidation. Be that as it may, it was an extremely brief one and anyone who was waiting to hop on this train might have missed it if they stopped to blink more than once.
A bull flag could be argued to have formed correctly, with three touch points at the bottom and three at the top, but then it was straight out of the upper trendline and the rally continued.
A trendline has been drawn in (faint dotted line) so that when/if the trend is broken it can be seen immediately. Beware a break below with a confirmation. That would potentially be the sign that the correction would be beginning.
If the rally continues, the horizontal resistance at $82,350 is the next target. Just above this at $82,820 is the high of the big bear flag that was set in early May. Making a higher high here would be a huge step towards changing the bear trend back to a bull trend.
Is a big cup and handle pattern forming?
Source: TradingView
The daily chart reveals a very interesting looking pattern that may be forming. The crash down from the bear flag high, followed by the bear market bottoming process, and now with the huge rally back to the high, has all contributed to form a big cup. All the bulls need to do is to push the price a little higher, although the cup is already there, if a little tilted. A rejection at this tough resistance would probably be the next move, and then the handle could be allowed to form. The measured move out of the top of the cup would be to $107K – a definitive move that would easily take the $BTC price out of its bear market.
How far down could the handle formation take the price? Looking at the horizontal supports, $78,700 and $76,000 are two possible targets, with the latter being the more likely. Although $69,000 is the 0.618 retracement, this is probably too far down for the handle to go without nullifying the pattern.
Measured move to $107K – how likely is it to play out?
Source: TradingView
The weekly chart puts into perspective what could be a game-changing pattern for the $BTC price. The potential $107K measured move would put the price right back up towards the highs again, and with the promise of a new high for a new bull market.
How likely is it that this pattern plays out? Currently it does look quite likely, although in technical analysis one always expects the unexpected.
At the time of publishing, the $BTC price is perhaps starting to roll over. Could this be the beginning of a handle pattern? Time will tell.
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