A steady decline in highs and lows over nearly three weeks means that BTC price is now back inside a bearish flag that has persisted for nearly four months. With Bitcoin looking set to continue falling, can the bears really take control and cause this correction to plummet?
Do I return to the channel or get another rejection?
Source: TradingView
The short-term frame for $BTC shows that the price is still surging below the descending channel after once again reaching the bottom of that channel. Now it’s up to the bulls to push the price back into the channel. If this does not happen and a rejection is likely, the price may fall through the uptrend line and the next bearish phase may begin.
If the bulls surprise the bulls, the $78,000 resistance band overhead along with the 200 SMA poses another obstacle to further price gains.
Sending a bearish signal is the short-term stochastic RSI momentum indicator. The 4-hour, 8-hour, and 12-hour indicators are at the top of their ranges, so they are not far from a negative price momentum signal when they roll over and move back down.
Golden Cross will come out soon
Source: TradingView
The negative picture on the daily timeframe is that the 200-day simple moving average (SMA) is coming down with all intents and purposes to drive the $BTC price back down. If the lows fall again, the current bearish phase is likely to continue. In the RSI at the bottom of the chart, the indicator line has clearly broken away from the last rising channel and may soon be rejected by the RSI-based moving average (yellow).
That said, the 50-day SMA is rising quickly and is only about a week away from surpassing the 200-day SMA, which would be the “golden cross.” Could this be the golden cross that starts the next bull market?
Bear market bottom occurs below the 200 week SMA
Source: TradingView
Weekly charts with key moving averages give us food for thought. First, it is important to note that the current bearish flag could be redrawn at a much sharper upward angle, which could still involve price action. This means that the $BTC price won’t have to go far to break out of the bottom.
The 200-, 100-, and 50-week simple moving averages still maintain the bull market order, with 50 weeks on the top and 200 and 100 weeks on the bottom sandwiched between them. However, it can be noted that the 50 stocks are falling rapidly and will likely fall below 100 stocks in the coming weeks. That said, there is still a long way to go to get below the 200-week SMA, which was last achieved as soon as we enter a new bull market in early 2023.
As you can see, most of the lowest price action during the last bear market occurred around the 200 share SMA. It wouldn’t be surprising to see this happen again, especially considering the last two bear markets lasted 53 and 54 weeks. So far, there are only 33 weeks left in this bear market. Week 54 will be the end of this bear market in mid-October. If this is true, you can imagine the current $60,000 bottom being tested.
The MACD indicator at the bottom of the chart shows a slightly shorter light green bar on the histogram. Will this bar turn red again, indicating more downside?
Disclaimer: This article is provided for informational purposes only. It is not provided or intended to be used as legal, tax, investment, financial or other advice.