Recently Bitcoin broke out of a descending wedge (yellow dotted lines) to show a potential sign into a reversal uptrend. However, Bitcoin looks to be approaching some key resistance dancing around $43-45K.
The current price is right around the 61.8% Fibonacci level from the drop back in May/June, but this also is the 38.2% Fibonacci level from the drop back in March 2020. There still is some promise that the price can break through the resistance here and head either upward or sideways, however, there are a few negative signs around the corner.
First off, one can see a potential pattern of a bearish Head & Shoulders pattern that formed over the past few months and the current price action is nothing more than a retreat back to the neckline. Furthermore, the current price is prime to start a continuation of a downward trend into a descending channel (as shown by the dashed blue line with the bottom being the bottom of the wedge's yellow dotted line). This looks to potentially be supported by bearish hidden continuation divergence as found on both RSI and MACD (as seen by the blue dashed lines on the oscillators), however, I must note that MACD has crossed positively on the daily chart, which is an indication of a potential bullish trend forming.
Either way, it looks like this is one of the key points for which direction the price may go in the next few months. If the price breaks above 45K and continues to head upward, then it might signal the next beginning of another bullish run (with potential sideways action until the bull run takes over). If however Bitcoin is rejected at the current prices, there are a few key points that I see to watch out: One is a rejection down to the top of the descending wedge to near 32-34K once again over the next week. Another key is a short term continuation into the bottom of the "newly forming descending channel" which could lead to a precipitous drop to near 27-28K (another key Fibonacci level) over the next weeks. Lastly, there is a possibility of a continuation downward, then sideways, then further down in the descending channel over the next few months to the next Fibonacci level to near 17-20K!
It looks like there is no "sure deal" for which way prices may head, but at the very least at least the trend may be more solidified shortly over the next few days. And as always, this is in no way meant as financial advice and is solely my opinion, but please like or comment if you agree or see anything further/differently.
The current price is right around the 61.8% Fibonacci level from the drop back in May/June, but this also is the 38.2% Fibonacci level from the drop back in March 2020. There still is some promise that the price can break through the resistance here and head either upward or sideways, however, there are a few negative signs around the corner.
First off, one can see a potential pattern of a bearish Head & Shoulders pattern that formed over the past few months and the current price action is nothing more than a retreat back to the neckline. Furthermore, the current price is prime to start a continuation of a downward trend into a descending channel (as shown by the dashed blue line with the bottom being the bottom of the wedge's yellow dotted line). This looks to potentially be supported by bearish hidden continuation divergence as found on both RSI and MACD (as seen by the blue dashed lines on the oscillators), however, I must note that MACD has crossed positively on the daily chart, which is an indication of a potential bullish trend forming.
Either way, it looks like this is one of the key points for which direction the price may go in the next few months. If the price breaks above 45K and continues to head upward, then it might signal the next beginning of another bullish run (with potential sideways action until the bull run takes over). If however Bitcoin is rejected at the current prices, there are a few key points that I see to watch out: One is a rejection down to the top of the descending wedge to near 32-34K once again over the next week. Another key is a short term continuation into the bottom of the "newly forming descending channel" which could lead to a precipitous drop to near 27-28K (another key Fibonacci level) over the next weeks. Lastly, there is a possibility of a continuation downward, then sideways, then further down in the descending channel over the next few months to the next Fibonacci level to near 17-20K!
It looks like there is no "sure deal" for which way prices may head, but at the very least at least the trend may be more solidified shortly over the next few days. And as always, this is in no way meant as financial advice and is solely my opinion, but please like or comment if you agree or see anything further/differently.