Bitcoin Quick Dip Below $80K Rejected: Bulls Regain Key Support – Next Move?

Some investors might have been nervous as Bitcoin fell below $80K on Tuesday. However, the dip was quite short-lived and the $BTC price bounced from the top of its bear flag and regained the major $80K horizontal support. Is that the extent of this period of negative price action, or could there be more to come?

Bear flag trendline holds up the $BTC price

Source: TradingView

As can be seen in the short-term time frame, the $BTC price fell out of the bull pennant, and also battled to hold the major horizontal support. However, from the bulls’ perspective, the star of the show was the top trendline of the bear flag. This was also pierced, but the price quickly regained this trendline and has since returned to try and hold above the major support and to try and reenter the bull pennant.

It may be that the bull pennant could be drawn differently with a lower bottom trendline. This incorporates the latest price action and provides a lot more touches, making this triangle the more valid pattern.

Up or down from here? There could be more touches of that lower trendline, but as the bear flag trendline rises to a similar level as the major horizontal level, these two supports should be strong enough to prevent any candle bodies from falling below them. The Stochastic RSI indicators recently touched bottom and are on their way back up. Upside momentum is probably more likely.

Battle royale begins

Source: TradingView

In the daily chart it can be observed that the $BTC price is still trying to consolidate above the major support and the top of the bear flag. This probably won’t be a drawn out process given that the 200-day SMA is bearing down fast on the price action, squeezing it into a narrowing space with the major supports beneath.

Something has to give. The 200-day SMA is a very tough proposition to get above, and it’s one of the main factors that tells us if this is a bull or bear market. Bull market is above.

Below the price is the major support and the top of the bear flag. While one further thing to consider is that the momentum is currently to the upside. 

The green circle is where this battle royale is going to take place. By the time the price action leaves this circle we should have a decent idea of its direction.

A waiting game in the weekly time frame

Source: TradingView

In the weekly time frame waiting is the name of the game. Less than half way through the week, anything can still happen. As it stands, the bulls have the upper hand for the short to medium term outlook. Major support is holding, The stochastic RSI indicators are at the top of their range, and there is a breakout in the Relative Strength Index (RSI) above the descending trendline, as can be seen by the green circles.

Will this still be the case at the end of the week? Only time will tell. 

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.