Bitcoin (BTC) broke out of a triangle pattern on Tuesday and price has come back to confirm the breakout on Wednesday. Is it up from here, or can the bears still pull the price back down?
$BTC surge coming sooner or later
Investor greed is creeping higher as the $BTC price maintains above the $118,000 support level. The king of the cryptocurrencies is likely to power into its next surge higher sooner or later, as institutions pile into an asset, that with gold, is arguably the only sound money haven in an ocean of rapidly devaluing fiat currencies.
Confirmation of the breakout?
Source: TradingView
The 4-hour chart shows how the triangle pattern is evolving slightly in order to accommodate the $BTC price. A breakout did take place on Tuesday, and it looks like the confirmation of this break is occurring.
Could the price sink back inside the triangle? Yes, of course, this is always an option, although the higher percentage chance is that a bounce would happen from here.
One factor to take into consideration though is that the Stochastic RSI indicators are just on their way back down. This isn’t really conducive to a bounce to the upside, so perhaps the price could continue to slide down the top of the triangle until the bulls are good and ready to send it higher.
If the bears do manage to wrest control from the bulls, a fall below $116,200 would be a time to sit up and start taking notice, as this could be the trigger for a rapid collapse to $112,000.
$117,000 to $120,000 range has formed
Source: TradingView
The daily chart reveals that a range is now forming after Tuesday’s top, with the top range defined as $120,000, while the bottom sits at around $117,000. The 50-day SMA (Simple Moving Average) is the blue ascending line. This does suggest the possibility that if there were to be a sudden violent shake out, the price could come down to retest the 50-day SMA, which just might be at that $112,000 level by that time.
At the bottom of the chart, the daily Stochastic RSI indicators are coming down nicely and could be expected to hit bottom by the end of this week. This could result in a signal of increased upside price momentum towards the end of the following week.
Steeper rise for this bull market over the previous one
Source: TradingView
Zooming out into the weekly chart view gives one more of a perspective on just how sharply the $BTC price is rising. Taking the 2021/2022 bull market as a comparison, if one looks at the tilt of the main moving averages (50, 100, 200) and then compares this with how these moving averages are climbing currently, it is noticeable that there is a steeper tilt to all of them this time around.
This could be because the last bull market was somewhat curtailed, given the FTX collapse, and the huge amount of leverage that was being utilised.
This time around things are different. The US government is squarely behind encouraging Bitcoin and crypto adoption, and institutions are starting to buy Bitcoin for their treasuries. Pensions are also starting to allocate.
Bitcoin may be in a short-term holding phase at the moment, but this isn’t likely to last long. Bitcoin is disappearing off of OTC desks (over the counter) rapidly and a resulting supply crunch may be coming. Continuing to hold Bitcoin looks like a wise move.
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.
