War in the Middle East or not, the U.S. stock market has continued to make high after high. Bitcoin still has a long way to go to achieve its own all-time high. Can the king of the cryptocurrencies hang on to the coattails of the stock market and ride them all the way back to $126K? Bull pennant confirms Source: TradingView In order for Bitcoin to even start on its journey back to the all-time high, support must be held. As it stands, the support below the $BTC price looks to be fairly solid. The major $80,600 horizontal level, with the top trendline of the bear flag just below it, should be strong enough. The price action is also inside a bull pennant , which has now been confirmed with a third touch to the top of the triangle. One minor note of concern is that a small M pattern has formed within the pennant. If this played out, it could crash the price through these major supports and back down to around $79,000. Be that as it may, the more probable scenario is that the price rebounds from the bottom trendline of the pennant and rises back to a potential breakout - U.S. stock market allowing. 200-day SMA enters the scene Source: TradingView Enter the scene the 200-day simple moving average (SMA) . In the daily time frame this is the next big test for the bulls. Getting above this moving average would be a real statement of intent from the bulls, and get above it they must if this rally is to continue. As can be seen so far, the $BTC price is being rejected from this line. The moment of truth will come as the 200-day SMA descends to meet the major horizontal support. One of these will have to give way to the price action. Below this we can observe that the first golden cross has taken place . This is where the 50-day SMA crossed up over the 100-day SMA. That said, the main golden cross is still to come. This involves the 50-day SMA crossing up through the 200-day SMA. It can be noted that as long as positive price action continues, this golden cross could even take place by the end of this month. Positives in the weekly time frame Source: TradingView Positives abound for the bulls in the weekly time frame. Last week’s candle closed well above what was major resistance . This week’s candle will need to also close above $80,600 in order to officially confirm this level as support. So far the candle has come back to test this horizontal line, which is a healthy thing to do before any potential big rally. In the Stochastic RSI, the indicators are right at the top of their range. It does look as though they might be about to roll over, but as long as they stay above the 80.00 level, they will still continue to signal upside momentum. In the Relative Strength Index (RSI) at the bottom of the chart, it can be observed that the indicator line has poked its head through the downtrend line , which more or less matches the bear market downtrend in the $BTC price action. The RSI indicator line has broken through and looks as though it might test the breakout before going higher. All of this looks very bullish, perhaps at least for the next few weeks. After that, some kind of reversal will probably need to take place. It just remains to be seen if this reversal takes us back into the bear market, or whether it will just be a healthy, decent-sized correction before price rallies back to the all-time high. 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.
