The Hidden Bitcoin Trend Line That Could Save the Bull Market

today, bitcoin price It fell below $40,000 for the first time since September — a price more than 50% below the market’s expectations for this time of year.

While the downtrend cannot be ignored, the recent lows have formed a trendline that can be traced back to the bottom of the bear market, which could keep the bull market going for longer.

The Importance of Technical Analysis and Building Trendlines

to that moment technical analysis In Bitcoin, trend lines are always important. When such a line holds, it signals to the market that it is time for a reversal. When they give way, the resulting crashes and panics are often dramatic.

For example, lose horizontal support line $6,000 at the end of 2018 immediately led to a plunge to $3,000. Once there, a bear market bottom is in.

Related reading | 2022: The year the long-term Bitcoin bull market may end

From the initial rally, Bitcoin has regained hope and another trend line has begun.instead of a Trendline This trendline spans price peaks or troughs, and this trendline spans extreme oversold readings on the daily RSI.

A long-term RSI trend line could cause a bounce | Source: BTCUSD on TradingView.com

Now or Forever: Bitcoin Bull Runs RSI Trend Line Must Hold

As Bitcoin price dips below $40,000 on BTCUSD daily chart, Relative Strength Index A long-term trend line was mined. The line itself has withstood a bear market bottom, Black Thursday and a sell-off to $28,000 in 2021.

Did the latest drop have enough momentum to break the support line? Or will it be held again?RSI readings alone suggest conditions are severely oversold – this is since bear market bottom.

BTCUSD_2022-01-10_09-33-23

Fourth time is the charm? | Source: BTCUSD on TradingView.com

During the last bull run, the daily RSI trendline touched a total of four times. The fourth is the final step before the bull market peak (green dashed line).

Related reading | Past Bitcoin Fractal Explosion Could Signal Imminent Record Reversal

The same trendline, once broken, caused Bitcoin to drop sharply from $20,000 to below $6,000 in less than a month in early 2018, and kicked off a bear market (dashed red line).

bitcoin Again at the trend line. Will the fourth knock prepare the market for a lift, or will the line break and start a new bear market phase? Bitcoin bulls may be now, or they may never be.

follow @TonySpilotroBTC on Twitter or join TonyTradesBTC Telegram Exclusive daily market insights and technical analysis education. Please Note: Content is educational and should not be considered investment advice.

Featured image from iStockPhoto, Charts from TradingView.com



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