Bitcoin (BTC) is breaking out of its descending channel on Tuesday, and this time volume is accompanying the breakout while a 4-hour candle has opened above the channel. Will the bulls be successful this time, or do the bears have yet another card up their sleeves? $BTC breaks out of descending channel Source: TradingView The 4-hour chart above displays the almost perfect channel the $BTC price has traversed within from the all-time high on 14 August. This is now the third occasion that the bulls have attempted to break out since that time. Could this be third time lucky? The price has broken out and a new 4-hour candle has opened above the descending trendline. Such a low time frame candle isn’t the most solid signal for a breakout, so a daily candle, if not 2 or 3 of them closing above the trendline, would provide a better affirmation of this breakout. That said, so far so good. The $BTC price has touched the $110,600 horizontal resistance and may get rejected at this first attempt. This would allow the price to come back down and either confirm the trend break before going higher, or possibly result in a fakeout if the price reenters the channel. If the bulls do end up retaining the upper hand, the first target would be to make a higher high by surpassing the last one at $113,500. 0.618 Fibonacci perfect support for potential rally Source: TradingView The daily chart contains an excellent perspective for the $BTC price going forward. Firstly, if one takes a Fibonacci extension from the bottom at $98,350 and pull it up to the top at $124,230, one can see that the 0.618 Fibonacci level falls perfectly at the support for what could be the bottom of this downtrend. Secondly, the Stochastic RSI on this time frame has been chopping along the bottom of its range for an extended period. Therefore, when it finally shoots back to the top it could be quite an explosive signal for upside price action. It must be reiterated though that there could be a turn back down from this first resistance level. However, this would potentially allow the 4-hour Stochastic RSI indicators to come back down and reset, and if the price comes back to that 0.618 Fibonacci support line, it would likely coincide with a retest and confirmation of the top of the descending channel. On the other hand, if the US stock market opens in bullish mood, the bulls might just whip the price up through the resistances and flip $112,000 into support before heading higher. $BTC holds price structure support Source: TradingView The weekly chart reveals how the $BTC price is still maintaining the perfect support level at $108,000. This would so far appear to be the next price structure step that will provide the solid base needed for $BTC to move higher. Once, and if, $119,000 is regained, this could then be the platform for the subsequent step higher. Lower down the chart, the Stochastic RSI for this time frame is showing that the indicators are nearly at the bottom. When they turn back up, this would likely signal the upside price momentum for this next move back to the high. At the bottom of the chart, the MACD would appear to be the only bad news. The blue indicator line has crossed down through the red signal line, and the first two red bars have materialised in the histogram. Nevertheless, the MACD is a lagging indicator, and if price does start heading north, this indicator would begin to turn back around and eventually follow it. 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.
