Weekly Time Frame
As the chart demonstrates, precisely three weeks ago, Bitcoin experienced a shakeout from the $26.8K level to its 9-year ascending trendline. However, the bearish momentum weakened, resulting in a consolidation phase above this significant multi-year threshold. As shown in the following chart, there is a clear bullish divergence between the price and its weekly RSI. There are two possible scenarios:
- The price experiences another decline, breaking the solid dynamic trendline, and drops to lower price levels. In this case, Bitcoin’s next support region will be the $10.5K-$12.5K demand zone. (Red box)
- The trendline supports the price and triggers a rally toward higher price levels. Given that the weekly RSI is in the oversold section(below 30) and there is an evident divergence between the price and the RSI indicator, this scenario is the most probable.
Nevertheless, if the RSI indicator exits the oversold section and consolidates above the 30 mark, a pullback towards the $23.7K and $25.1K will be imminent.
4-Hour Time Frame
Bitcoin is forming an ascending price channel and moving inside it. The price has broken the channel’s middle-trendline and retested it as a pullback pattern. The channel’s mid-boundary will either support the price and push it to test the upper trendline or fail to hold the price. In the second scenario, the channel’s bottom will be considered the primary support for the cryptocurrency’s price.
Additionally, a trend reversal cannot be anticipated until Bitcoin breaks above the yellow trendline and consolidate above it.