Having suffered a downward trend since early June, the Bitcoin price looks to be breaking out of its channel. Could this be the start of a new trend, or is this going to be yet another fakeout?
An end to the bull market?
The bitcoin price has been dogged with some quite difficult headwinds for the last few weeks. Among these have been long term holders taking profits, miners selling in order to remain profitable after the halving, and Wall Street hedge funds damping down the price with their “carry trade” strategy.
There have even been those on social media who have called for an end of the bull market, saying that the top was in at $73,800 and that $BTC has been rolling over ever since.
Is this likely? Very probably not. Bitcoin has had well delineated bull markets of around 3 years throughout its admittedly short history, and of course, things can always change, but with the institutions finally arriving, would this be the first bull market to be cut short?
$BTC channel breakout
Source: TradingView
In the short term time frame of the daily, the $BTC price can be seen to be attempting a breakout of the channel. This pattern is certainly bullish, but the top trend line of the channel, plus the resistance at $66,000 are managing to contain the price, at least for now.
Momentum indicator is key
Source: TradingView
Zooming out in the weekly time frame it can be noted that what was resistance in the daily time frame is actually support. Still stronger support at $64,000 was instrumental in holding up the price on Tuesday, as the wick down to this level shows.
One major concern is the stochastic RSI for the weekly time frame. This momentum indicator has crossed back down and it looks like we may see a double dip here. Even if this were to happen, it wouldn’t be too long before this indicator hit the bottom and then started crossing up, bringing that important momentum back in again.
However, if $BTC does break out, and there is some decent price appreciation into the end of the week, the fast (blue) and slow (red) indicator lines could cross back over and signal positive price momentum as early as next week. In addition, hidden bullish divergence could be about to 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.
