Bitcoin Weekly Close Above Major $80K Level: Is the Rally Just Getting Started?

A weekly close above what was previously major resistance is a strong statement of intent by the Bitcoin bulls. Actually printing an entire weekly candle above this level is probably the next target. Can the bulls now use this level as a base to go higher, or will the gravitational pull of the bear market trend prove too strong? 

Bull pennant forming?

Source: TradingView

The short-term time frame for the $BTC price reveals that it is just above the major support and the top of the bear flag. The price action appears to be forming a triangle, with 3 touches on the bottom and only 2 on the top so far, although the next rally higher would likely provide that 3rd touch.

Given that the price is in an uptrend (within the macro downtrend) this triangle can be seen as a bull pennant, which is a continuation pattern to the upside. While it is still early days, there is the possibility that if the pattern plays out, it could take the price up to around $90,000, which is the next strong level of resistance.

If support holds, path to $90K is open

Source: TradingView

The daily time frame perhaps gives a clearer picture of how the $BTC price is consolidating above the horizontal major support and the top of the bear flag. One can see the bull pennant that is forming and the green arrow that points to the measured move out of that pennant. $85,000 is a reasonable resistance level, but generally the path to $90,000 is pretty much open, as long as support holds.

At the bottom of the chart the Relative Strength Index (RSI) has the indicator line still playing with the strong downtrend line. Given that the price action is breaking out, it would be expected that the RSI indicator line would also break out. This will need to be monitored, as divergence could start to form.

Bulls must take full advantage of current upside momentum

Source: TradingView

In the 2-week chart the latest candle closed nicely above the major horizontal level, and on Monday the $BTC price has come straight back down to test this as potential new support. The price is also holding above the top of the bear flag. What is not to like about this situation?

In the weekly chart the Stochastic RSI indicator lines have reached their top limit and may be about to roll over. However, in this 2-week chart the indicator lines are only just getting above the mid-level and have a good way to go before reaching the top.

That said, the question needs to be asked: “Will there be enough upside momentum to take the price all the way back to the all-time high?” If these 2-week time frame Stochastic RSI indicators get to the top of their range and the price is still not above $98K this would become a failed rally. The bulls need to get their skates on.

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.