Bitcoin (BTC): A Test of Patience – Rally Incoming?

Bitcoin (BTC) has continued to founder, and retail has left the crypto sector en masse. With a U.S. stock market that just keeps going up, why would anyone hang around in Bitcoin? It’s precisely at these times, when Bitcoin is most unloved that huge rallies can begin to form. With Bitcoin it’s always just a matter of patience.

$106,000 horizontal support holds once again

Source: TradingView

Bitcoin surprised on the extent of the downside in this latest pullback. The $BTC price was eventually held up by the $106,000 horizontal support level again, and a bounce has materialised. No major structures were broken, so at least until further notice, the bull market is still intact. 

Since making the bounce, $BTC has broken through the $108,000 level and has flipped this back into support. Also, the price has pierced through the trendline (faint dotted line) for this reversal and so it might be expected that it climbs back to challenge the major trendline above (bold black line), and the all-important $116,000 horizontal resistance level.

A much longer support trendline

Source: TradingView

Moving right out into the weekly time frame perhaps another trendline comes into play. The main trendline so far has been the 7-month trendline shown as a faint dotted line. However, below this is a much longer trendline (bold black line) that stretches back to August 2024. The issue with this trendline is the big dips in April this year that sent candle bodies through it, so it breaks the neatness of the trendline. That said, there are five other weekly touch points that vouch for the validity of the trendline. Also, if one switches to a logarithmic view, the candle bodies are perfectly inside the trendline.

This trendline is more reliable for the Bitcoin price than the shorter one above, which has generally seen the price collapse below it during these last three weeks.

The longer trendline can be seen to shepherd the $BTC price up to an apex formed on the other side by the 8-year ascending trendline. One of these two trendlines will have to give, and this is likely to signal a bear market, or a continuation of the bull market.

An ascending wedge pattern

Source: TradingView

Going even further out into the 2-week time frame, the aforementioned trendline takes on perfect validity. The concern is that the pattern that is being formed by the two ascending trendlines is an ascending wedge. The majority of these patterns would tend to break to the downside, so for the Bitcoin bulls to force a continuation of this bull market will require a major effort. 

The main horizontal resistance level on this time frame is raised slightly to $117,000. It can be observed that several candle bodies and wicks have stopped at that level, and that three candle wicks so far have continued on up to retest the 8-year ascending trendline.

One big indicator that still remains with the bulls is the Stochastic RSI. The weekly chart showed that the indicators are very near the bottom, while this 2-week chart reveals that they are on their way down. 

There is the chance that enough upside momentum will be generated that could take the $BTC price through the top of the wedge pattern and into a last blow-off top. Watch out for this scenario, while keeping a close eye on any hints of a rejection.

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.