The Hidden Bitcoin Trend Line That Could Save The Bull Run
Today, Bitcoin price sank below $40,000 for the first time since September – a price more than 50% lower than what the market was anticipating this time of year.
While the downside has been impossible to ignore, the latest sweep of lows has resulted in a touch of a trend line dating back to the bear market bottom that could keep the bull market intact a bit longer.
Technical Analysis And Framing The Importance Of Trend Lines
When it comes to technical analysis in Bitcoin, trend lines always matter. When such lines hold, it is a sign to the market that it is time to reverse. When they give way, the resulting breakdown and panic is usually dramatic.
For example, losing the horizontal support line of $6,000 in late 2018 immediately resulted in a plunge to $3,000. Once there, the bear market bottom was put in.
It was beginning at that initial bounce that restored hope in Bitcoin, that yet another trend line started. Rather than a trend line drawn across price peaks or troughs, this trend line is drawn across extreme oversold readings on the daily Relative Strength Index.
Now Or Never: Bitcoin Bull Run RSI Trend Line Must Hold
As Bitcoin price swept below $40,000 on BTCUSD daily charts, the Relative Strength Index tapped a long-term trend line. The line itself has withstood the bear market bottom, Black Thursday, and the 2021 selloff down to $28K.
Does this latest move down have enough momentum to break through the support line? Or will it hold once again? The reading alone on the RSI suggests conditions are highly oversold – the fourth most extreme since the bear market bottom.