The king of cryptos saw a slight increase of 5% since the first Monday in October. This increase was the logical consequence of the rebound of the price of Bitcoin on the lower line of the ascending parallel channel. Indeed, the drop over the weekend drove the price towards the lower part of the channel. Since then, Bitcoin has been trying to reach $20,800, the upper part of this pattern.
Bitcoin (BTC) in an ascending channel, but not out of the woods yet
Bitcoin (BTC) price started moving in this channel since September 19th. Theoretically, this pattern should end in a bearish movement if there is a break in the lower line. However, the crypto is in a slight uptrend and shows no signs of slowing since Monday. Thus, Bitcoin is unlikely to slow down before reaching the top of the Channel at $20,733. Then, this level lines up with horizontal resistance and a very strong downtrend line. Once this goal is reached, BTC will be at a decisive point in its price evolution.
However, investors should remain cautious as the king of crypto is not out of the woods yet. Indeed, nothing is confirmed as long as the price of Bitcoin remains in this channel. BTC will only be bullish when the price manages to turn the $20,733 resistance into support.
On the other hand, one could also envision the price returning towards the bottom at $17,590. Levels below this low appear to be the best places for bulls to initiate a bull-run. Nevertheless, the price of Bitcoin may not come back to it again by breaking above the resistance $20,733, the top of the ascending channel. A close above this level on a weekly candlestick will invalidate the bearish outlook. Therefore, this will potentially trigger a 13% rally that will target the 200 weekly moving average ($23,470).
Bitcoin is in a medium to long-term downtrend channel (since November 2021). This shows that this cryptocurrency remains in a bear market and the sellers remain in control. Moreover, the “fear & greed index” indicator points to 20. Thus, it seems that pessimism still reigns in the crypto market, led by Bitcoin. In the event of a bearish scenario, there is also still a fairly critical support at $18,600. If Bitcoin price falsely breaks out of the channel, a positive reaction on this level will be a bullish signal. Moreover, the RSI is also showing a downward trend, which aligns with the bearish trend of BTC.
In sum, here are the two important points to take away from this analysis: First, the price of Bitcoin continues to rise in an ascending parallel channel in the short term. But it is still moving in a medium to long term downtrend channel. Secondly, the current rise could lead the price to break above the resistance at $20,733. The transformation of this resistance into support will be the signal for a bull run towards $23,470.
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