Chaos reigns in the crypto market right now. Bitcoin dipped suddenly on Monday morning, stopping just short of the major $112,000 horizontal support. A small recovery has since taken place, but high volatility suggests this dip may not be over yet. $BTC crashes out of ascending channel Source: TradingView Bitcoin (BTC) has finally rolled over and plunged back down to the $112,000 major horizontal resistance level. As can be seen in the 4-hour chart above, the $BTC price left the ascending channel, stayed with the bottom trendline for a while, and then held support at the $115,700 level. However, gravity was too strong and a pretty significant dip then took place. Putting this into perspective, what has just occurred can probably be seen as a very healthy pull-back. An ascending channel is great when price is following it up, but it is in fact a bearish pattern. There is a much greater chance that price will break down rather than up from this pattern. Now that the breakdown has happened, and as long as the $112,000 horizontal support holds, this dip has reset the price beautifully. A measured move out of the bottom of the channel takes the price down to $112,000, and it has completed this perfectly. There is still a chance that market makers could seek to take out traders jumping onto this potential recovery, and therefore another quick dip down to $112,000 would serve to wipe out these new longs. Finally, at the bottom of the chart, the Stochastic RSI indicators are just about at the bottom, as they are for the 8-hour and 12-hour. The daily is coming down fast, suggesting that it may not be long before upward price momentum kicks in again. The RSI, which signals oversold and overbought levels, has its indicator well into oversold territory. This is the lowest this indicator line has dropped since April - another good reason for a recovery from here. Major support needs to hold Source: TradingView The daily chart shows that the $BTC price is perhaps coming back to the $112,000 horizontal support. That said, the price is sitting on another decent horizontal support level at $112,600, so this might hold. The RSI for this time frame reveals that the indicator line has arrived at a band of resistance, so a bounce could occur here, or at the lower boundary of the band. The MACD at the bottom of the chart looks as though it is just about to flip into the red bearish territory. The blue indicator line is poised to cross below the red signal line, while the next bar in the histogram could be red. That said, the rest of the day is still to play out, and if the recovery is strong enough, things could still turn bullish again. Concerns on the weekly time frame Source: TradingView Zooming a long way out into the monthly time frame one has to acknowledge that this chart is a concern. The bigger the time frame, the more reliable the data becomes. There are two main issues in this time frame. Firstly, the candle wicks for the last three monthly candles are rather long. If one looks back to the top formed at the end of 2024 and into early 2025, the top candle wick was a similar length. Long wicks such as these attest to strong selling pressure when a particular level is reached. Nevertheless, there is still hope here. There are 8 days left in this month, and if the price can be pushed back up over that $115,700 resistance, the bulls could be in charge once again. The second issue on this timeframe is the cross-down of the Stochastic RSI indicators. In such a large time frame this could be the kiss of death. However, once again, there is still time left for the blue indicator to cross back up by the end of the month. All in all, things are finely balanced. If the $BTC price can recover strongly, and all the shorter term momentum indicators are in the process of resetting, which does bode well for an upward movement, the bulls can pull this one out of the fire. On the other hand, if the recovery does not take place, or it is weak, a much larger correction could be ahead. 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.
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