Bitcoin (BTC) Weekly Close Above Key Support: Is the Bull Market Still Alive?

While Bitcoin (BTC) did have a weekly close above the key support of $106,000, Monday morning sees the king of the cryptocurrencies already down as much as 3%. Can the bulls survive this dogged down movement, or could Bitcoin be about to slip into a bear market?

Strong support below suggests a bounce incoming

Source: TradingView

Plenty of volatility is beleaguering Bitcoin on Monday morning. A sharp fall to start the day took the $BTC price from $110,500 as low as $107,000. A loss of more than $3,000 may not be a good way for the bulls to start the week, but a bounce might be taking shape currently.

The Stochastic RSI indicators at the foot of the chart are nearly at their bottom. With strong horizontal support and a major trendline just below, it would make sense to see some kind of an upward impulse from hereabouts.

Drawing a Fibonacci from where the price touched the major trendline, and up to the higher high, puts the 0.618 and 0.786 Fibonacci levels at major supports. The 0.786 Fibonacci lends its support to the $106,400 horizontal level - another reason the price will probably not go below this.

Major trendline is key

Source: TradingView

Moving out into the daily time frame it can be observed that the major trendline is holding fine so far. The $BTC price has dropped below the 200-day SMA (red line) once again, but if one looks back at this moving average it can be seen that when the price came below, this was when the major trendline was tested. As things stand, as long as the price maintains above the trendline, the uptrend is intact.

At the bottom of the chart, the Relative Strength Index reveals a support line at around 35.00. Whenever the indicator plays with this line there is normally a bounce right afterwards.

Strong upward trend persists

Source: TradingView

The 2-week time frame for the $BTC price illustrates that generally all seems to be well with the number one cryptocurrency. This is in stark contrast to the doomsayers on social media who say that $BTC is already in a bear market. Of course, it could be true, but as long as the trend holds it is up until it isn’t. 

In this time frame there is no candle body poking through the middle of the major trendline. Instead, there is only one candle wick, and this appeared right at the end of a wedge pattern that also had many analysts fearing the worst. 

The Stochastic RSI indicators are coming down fast, following those in the weekly time frame, which are already very near the bottom. Once these both turn back up there should be plenty of momentum to take $BTC to a new high.

The RSI indicator is also angled down, but it can be seen that as long as it bounces back from the 50.00 level price can continue upwards. However, once it falls through this level and confirms below, $BTC will have probably begun its bear market.

Nevertheless, as things stand, one last big surge to the upside is still looking more likely than not. There could be a collapse, perhaps caused by issues in the U.S. economy, but this would probably serve to hasten the momentum indicators to the bottom from where a strong signal can produce a rally back to the upside.

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.