Bitcoin (BTC) Holds Trendline Breakout: Market Analysis and Price Outlook
Bitcoin (BTC) has broken through the descending trendline of the last three months and is currently consolidating above. Is a dip back below next, or can the bulls hold the line and send the price upwards?
A significant breakout for $BTC?
According to renowned trader Peter Brandt, in a post on X on Tuesday, trendlines are the least significant when looking at chart construction. He was referring to the $BTC cross up through the descending trendline, which occurred last Friday.
While he is correct, a Bitcoin rally has to start somewhere, and a cross up above a long-time descending trendline could certainly be a good event on which to begin a rally.
Short-term bearish pattern for $BTC
Source: TradingView
The short-term time frame chart above shows the $BTC price action since the breakout. While the price has consolidated above the descending trendline, the bulls have been unable to find the momentum to push the price up further.
As it stands, the important local swing high at $88,630 is not being threatened, and the consolidating price action has resulted in an M pattern being formed. This is bearish if it plays out. The price would need to fall below the neckline at $83,000 and confirm below. If this box is ticked, the measured move for the M pattern takes the price down to $79,500, which would once more be below the descending trendline.
While this would not be the end of the world, as its already been ascertained that trendlines give a lesser signal than other chart indications, it could serve to dent the confidence of already nervous market participants.
Or could it be bullish?
All this said, the bull case also needs to be discussed. It could be that the horizontal support in the area of the M neckline might actually hold. If the price is able to bounce off of the neckline and continue upwards, we could be looking at a W pattern instead. If this was to materialize, a measured move could possibly take the price up to around $91,000.
Price and indicators need to break resistance
Source: TradingView
Zooming out into the 5-day chart, it could be taken that the price still hasnt broken out in this time frame. At least 5 touches of the underside of the descending trendline backs this up. Some decent support comes in at $82,500, and this could serve to hold the price up.
The indicators at the bottom of the chart give somewhat mixed messages. The Stochastic RSI has the blue indicator line on top, which is bullish. There is previous resistance structure at the 20.00 level though, and it will be tough to get through this. The RSI is showing a continual downward trend, and that the indicator line is just below this trend currently.
If price, and both indicators are taken into account, all of them will need to break resistances in order for Bitcoin to get back on the path that leads to the upside. The next few days and weeks will be critical.
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.
Text source: Crypto Daily™
