Bitcoin (BTC) is up $11,000 from a potential bottom. Is this the limit of the current upward impulse, and how far could the price fall if the bears do step in now? Market sentiment is just starting to change. The Fear and Greed Index is still in Extreme Fear, but at a reading of 25, the index may soon move back into the Fear segment, reflecting that at least as far as the market is concerned, the worst may be over. A break or rejection of $91,450 horizontal resistance? Source: TradingView The $BTC price is up again on Friday morning, with a 0.50% rise currently. It can be seen that the price is leaning heavily against the $91,450 horizontal resistance level, which could actually break. If it does, the price is likely to head for the top of the flag, and could even rise to challenge the next horizontal resistance at $94,400. That said, the turn of the bears is approaching. All short-term Stochastic RSI indicators are at or near the top, and so some kind of corrective impulse would be expected to occur. The key to whether this is just a relief rally, or whether it’s something much bigger, could be the size of the coming drawdown. If the bulls are able to keep any corrective impulse to just a shallow dip, they are more likely to be back in the driving seat, and the main price rally can continue. The problem the bulls will have is that the current pattern is an ascending channel. These usually break to the downside, and not the upside. A further danger is that the channel could be a bear flag and that a massive drawdown could be the result if it played out. Bulls running out of steam Source: TradingView In the daily chart it looks like the bulls could be starting to run out of steam. Further upside would have to involve a break of the descending trendline, and a break of the horizontal resistance. Of course, there is always the chance that this first barrier could break down, and possibly even the next resistance. However, the more probable outcome is a rejection for $BTC here, and then it will remain to be seen whether the price can hold above the major ascending trendline. Higher time frame looks ripe for a major rally Source: TradingView Looking at the weekly time frame and at the Fibonacci levels taken from the swing low to the swing high of this high time frame move, the accuracy of the Fibs has to be admired. If the bottom has truly been found, then this weekly candle is based perfectly on the 0.786 Fibonacci, which is the deepest of the retracement levels, and a precise place for a bounce. It also just happens that the major ascending trendline passes exactly through this level at the precise time that the price came down to it. Coincidence? This is very likely a deep retrace in an ongoing bull market. The 36% fall shocked the life out of many investors, and unfortunately a lot of these will have sold. Nevertheless, the market is like the jungle in this respect, and therefore only those with the strongest conviction hold on. The Stochastic RSI indicators at the bottom of the chart are now showing a cross-up. While in the short term there are still probably some ups and downs to come, the higher time frame looks ripe for a major rally. Could the $BTC price be back near the all-time high by the end of December? 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.
