BTC Chart Alert April 8: Approaches Major Downtrend Again – Rejection or Breakout Imminent?

Bitcoin has arrived at the point where it is knocking on the door of the 6-month + downtrend line. With some good news out of the Middle East, could Bitcoin ride the improved sentiment trend and break to the upside? Do the bulls need more time to renew their strength? Or, could the bear flag still play out?

$BTC price reaches $72,800

Source: TradingView

In the 4-hour time frame it looks like the $BTC price is baulking at the $71,700 horizontal resistance. The price did penetrate this resistance late on Tuesday, but a quick 4-hour candle wick up to $72,800 and the bear market trendline was immediately rejected. The price has now come back below the horizontal resistance, and could eventually be rejected from there as well.

If the bulls are able to continue this rally, and the downtrend is broken, they would still have the strong $74,000 resistance level to contend with. On the other hand, if buyer exhaustion does start to tell on the price, it could come back to retest and confirm the $69,000 level as support. The bear flag lower trendline and the strong $66,000 horizontal support are also possible retracement targets.

Downtrend line redrawn

Source: TradingView

In the daily chart the bear market trendline has been redrawn to just touch the tip of the wick for the last retest in January. This would mean that the current $BTC price has still not even reached the trendline. That said, it is nicely above the major support and is also resting on top of the 50-day simple moving average (blue line).

At the bottom of the chart, the indicator line in the RSI is standing proud above the last downtrend line. The last two times these downtrends have been broken the price did rally well.

The trend is still down

Source: TradingView

If the ceasefire holds, and news out of the Middle East improves, this might be just the kind of catalyst that the $BTC price needs in order to break above the downtrend, and begin to change the trend around. 

At the bottom of the chart, the RSI indicator line is breaking above its own downtrend line. It’s on this higher time frame that these trend breaks have a lot more validity.

Nevertheless, there are still uncomfortable factors existing that tell us that this bear market may be far from over. Chief among these is the bear flag. While we’ve recently had a rally up from the bottom of the flag, unless the price breaks through the major downtrend, we can still see the price fall out of the flag to much lower levels.

The current trend is still down, so it’s going to be a case of watching what happens over the rest of this week really closely. Short-term Stochastic RSI indicators are reaching their tops, so if the price does retest the downtrend, it is more likely to be rejected. 

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.