After hitting a new all-time high on Monday, the Bitcoin price has been rejected from a multi-year trendline. Losing $5,500 since the top, this is still a very shallow dip. Is there more to come, or are Bitcoin bulls ready to push $BTC up into price discovery? Deeper dip, or back to the highs from here? Source: TradingView The 4-hour time frame for $BTC shows that so far this is a very shallow dip. According to the Fibonacci extension levels (in blue) the price has only just dipped below the 0.236 Fibonacci, which is the first of the levels. If the price heads back to the top from here it would be extremely bullish. That said, deeper reversals are healthier and would generally lead to more sustained upside price action over the longer term. Therefore, if the price did continue to fall, at least to the 0.382 Fibonacci which coincides with good support, and even better to the 0.5 Fibonacci level, the next swing high could contain more power and momentum. Nevertheless, the price does what the price does, and if it’s up from here then so be it. The Stochastic RSI has its indicators posturing to rise from here, and the RSI at the bottom of the chart could be about to start ticking up. These would both suggest that this may be a bottom and that the $BTC price could head back up to the multi-year trendline and a prospective new all-time high. Inverse head and shoulders pattern continues to form Source: TradingView As first put forward in Tuesday’s article , an inverse head and shoulders pattern could be forming underneath the multi-year ascending trendline. The right shoulder could already have come down far enough, or the price may still drop a bit further, perhaps taking it down to the $120,000 horizontal support level. The RSI at the bottom of the chart has its indicator line still above the descending trendline. If it came down a bit further, this could correspond to a slight lower price hitting the horizontal support. That said, even if the price goes sideways and up from here, this would be sufficient to form that right shoulder. As laid out in yesterday’s article, the measured move would take the $BTC price to around $145,000. Is an 8-year trendline about to be broken? Source: TradingView The monthly time frame gives a real bird’s eye view of the multi-year trendline, which began at the top of the 2017 bull market, was touched at the first top of the 2021 bull market, and has now been tested three times in this current bull market. With many indicators suggesting that this current bull market is nowhere near a top yet, perhaps this 8-year trendline could finally be about to be broken, and when such a long-time barrier falls, the upside price momentum as it emerges could be huge. Both the Stochastic RSI and the RSI on this very high time frame are showing bearish divergence. Firstly, the Stochastic RSI indicators will need to cross back up as they have done in the weekly and 2-week time frames. Secondly, the indicator line in the RSI will need to break above the descending trendline, which it is right up against currently. If both of these events happen, this would likely coincide with a break of the 8-year trendline by the $BTC price . Astonishing price levels could follow. 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.
