From the point of view of technical analysis of BTC/USD, on Friday evening the price of Bitcoin was near the lower boundary of the ascending channel (shown in blue). This was alarming as it indicated that the market action could result in a weekly bearish candle forming with the price of BTC down by around 5% — something that hasn’t happened since August of last year.
However, this did not happen, as the price recovered over the weekend, forming rebounds from the lower border of the channel. The lower shadows of the candles are a sign of demand forces. Moreover, the bulls have broken through the downward trend line (shown in black). Will the bulls be able to return the price of Bitcoin to an upward trajectory within the specified trend?
Doubts remain.
→ Bitcoin “still looks overbought,” JPMorgan strategists warned, predicting a decline to USD 42k.
→ Bloomberg writes about record capital outflows from Bitcoin ETFs last week.
→ The level of 70k looks like an important psychological resistance. Above it, the Bitcoin price formed a double top pattern with an all-time high at point A, after which the bears clearly became more active. They successfully pushed the price to minimum B, breaking the support of the channel median line.
The price of Bitcoin starts the new week around the 50% retracement from the decline A→B (about -16%). This gives reason to assume the development of consolidation.
But if the price again falls to the lower border of the channel, then this will more clearly indicate the inability of the bulls to resume the upward trend — and therefore put the lower border of the channel at risk of a bearish breakout.
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