Bitcoin has been delivering results for most of the past few weeks a painful lesson for bulls. The largest cryptocurrency by market capitalization has fallen more than 22% over the past month, breaching support levels that many traders had considered established.
Bitcoin is still trapped under a declining trendline and current structure is still in favor of sellers unless the price can regain key resistance levels. However, the technical analysis projection leaves room for a recovery move like Bitcoin breaks out the bearish trend and starts to build momentum above the confirmation levels.
Bitcoin within a 4-hour bearish structure
Bitcoin’s 4-hour chart shows price action move within one bearish structure, with lower highs and lower lows forming below a descending resistance line since the swing high above $82,800 in May. The rejection of that swing high has now pushed Bitcoin below a weak low/liquidity range at $66,000, and the break in the structure of the diagram and the change in character labels show how control shifted from buyers to sellers.
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The bullish case does not stem from a confirmed reaction at $66,000, but from the possibility that Bitcoin can regain the lost structure after the recent collapse. However, if Bitcoin starts to push back above the nearby confirmation area around $66,948 and then breaks above the descending trendline, this move could open the way for a climb towards the higher resistance levels shown in the 4-hour chart below.
Bitcoin 4-hour chart. Source: TradingView
The goals stacked above and what they all mean
A trendline break, confirmed alongside a strong 4-hour close above the bearish structure, would not immediately resolve the current bearish mood that Bitcoin is trading in. However, it would initiate a move towards resistance price levels that continue to rise. change the momentum in favor of Bitcoin bulls.
A stronger bullish signal would only come if Bitcoin breaks back above the descending trendline. The technical chart places this descending trendline around $71,495, and this is the level that could decide whether the recovery has enough strength to continue. A rejection below that price range would maintain the bearish structure in place, but a clear break above would challenge the current trend and allow the bulls to develop higher price levels.
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The next level is around $75,952. This is an intermediate resistance and breakdown level, meaning it could be the next big test if Bitcoin breaks the resistance trendline. The highest and most important target in the current structure is around $79,453, where the major resistance and bearish control level is located.
Above that, the premium offering area and institutional sales area extends from about $77,000 to just above $82,000. Therefore, according to the projection on the map, a confirmed breakage of the current bear trend could send Bitcoin back to its May high of $82,000, where it could face another test of resistance.
Featured image created with Dall.E, chart from Tradingview.com