Bitcoin (BTC) Still in Downtrend: Not Out of the Woods Yet – Price Analysis

Since Monday, the Bitcoin price has gained 12%, equating to a rise of around $10,000. However, the king of cryptocurrencies is not out of the woods yet. With the price currently up against horizontal resistance, and with the main down trend line overhead, there is still work to be done by the bulls. $10,000 surge running out of steam? Source: TradingView The Bitcoin bulls really pulled their weight on Tuesday which was exactly what the situation called for. At one point, the $BTC price had dipped below the major trendline, and it seemed that the previous $80,000 low may have been in danger. However, the bulls sprang into action and a $10,000 surge was the extremely quick result. The surge took the price back above the major trendline, through another descending trendline and resistances, until it perhaps ran out of steam at the $94,000 horizontal resistance. There is perhaps still some gas left in the tank to surmount this resistance and even retest the main downtrend line. That said, this was quite a powerful surge, and the shorter term momentum indicators are starting to reach their tops. Possibly the best scenario for the bulls from here would be for the price to chop sideways for a few days in order to achieve a reset. The opposite scenario would be for the price to fall back below the major trendline. W pattern confirmation next? Source: TradingView The daily chart shows that a W pattern is still playing out. As can be seen, the W has formed, and the $BTC price has come up past the neckline. The next logical move would be for the price to come back to the neckline to test it and confirm the pattern. At the bottom of the chart, the RSI is still looking positive. The indicator line broke through the downtrend line and has tested and confirmed the breakout. This is a very good sign for the price action, as this would normally follow the RSI. Is the $BTC price in a huge wedge pattern? Source: TradingView Looking at the weekly chart, and viewing the previous big patterns that have formed during this bull run, it can be seen that in the current price action there is the possibility of an even bigger wedge pattern than the previous one. Given that price will normally break out of these patterns before coming to the end of them, this allows the current wedge pattern to overlap the major ascending trendline. The price would normally break out to the upside from a falling wedge pattern. At the bottom of the chart, first the Stochastic RSI has its indicators crossed back to the upside, promising big price momentum if the indicator lines get above the 20.00 level. Then the Relative Strength Index is showing some concern. The indicator line has dipped below a line that is normally associated with bear market activity. If this is a fakeout, it is a big one, and the bulls will need to really get a rally going in order to bring this indicator line back above the key 44.00 support level. Other than that, things are still balanced nicely. Bitcoin has been walking the cliffedge, and a slip could still spell disaster. Nevertheless, things are looking ripe for a recovery and a potential surge back to a new all-time high is starting to look like a distinct possibility. 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.