Bitcoin alleviated many uncertainties after it opened in the green and climbed briefly above $49,000 yesterday. Since this move was made on the back of a descending channel breakout, the market was expected to pump higher.
However, that has not been the case so far, as Bitcoin was still grappling with selling pressure around the $48K price level. The market also seemed to be reflecting a delayed reaction to whales aggressively purchasing BTC. Chances of a breakout above $50,600 were still high but falling back towards $46,000 could also a possibility.
BTC 4-hour chart
The lower trendline, which extended from late-July low’s, was already breached by selling pressure as BTC closed below $47,000. While buyers did flip the script and push BTC back above this trendline, momentum seemed to die down almost instantly.
Moreover, the last few days have seen a troublesome resistance around $49,4000 which has denied BTC a chance to retest the $50,000 price level. If this continues to be the case, BTC would fail to form a new high above $50,600 and this would put its uptrend in jeopardy.
BTC Back to $46K?
It is interesting to note here, that BTC faced similar worries when attempting to climb above its 78.6% Fibonacci Extension during mid-August. After two failed breakout attempts, BTC retraced all the way back towards $44,000, which triggered a strong bullish response.
However, the chances of a pullback towards $44,000 were low. Instead, this narrative goes to show that BTC has threatened to flip its uptrend previously, but buyers stepped in at important price levels.
So where can buyers trigger another bull run? An immediate reaction could take place at its press time level of $48,800, since the area clashed with BTC’s bottom trendline. A double bottom formed at $46,000 would also work favorably if BTC dips in the coming days. When prices do break above $50,600, the next important step would be a close above $52,700.
The 4-hour RSI traded above its equilibrium and gave a slight edge to the bulls. Moreover, the Directional Movement Index’s -DI and +DI moved closely together, a sign that BTC lacked a clear market trend. On the plus side, Awesome Oscillator responded to two lower peaks by climbing back above the half-line. This meant that bullish momentum was creeping into the market.
Those expecting an immediate blowout might have to wait another 24 hours, which would add more clarity to BTC’s long-term trajectory. If BTC fails to close above $50,600, another drawdown can be expected towards $46,000. However, recent movements suggest that this might not be the worst case scenario.