Bitcoin (BTC) has to make a move by next week. The weekly chart for BTC/USD
shows that Bitcoin (BTC) is about to close a weekly candle right next to the downtrend resistance. If this candle closes above the downtrend resistance, which is quite likely, we will see the beginning of a new cycle from next week. If this candle closes below the downtrend resistance, it is still possible to see a green candle next week. However, if Bitcoin (BTC) forms a red candle next week, this would shift moment towards the downside. That would mean that Bitcoin (BTC) has faced rejection at the downtrend resistance and will now have to rest $5,800 again. If the price tests $5,800 again, there is a very strong probability that it might break below it.
These are the possibilities, but we are more interested in probabilities. If you look at the weekly RSI on the above chart for BTC/USD, you will that it has been trading in a falling wedge. This is a very bullish development. If the price were to break to the upside, the RSI conditions would totally support it. The same is true of the weekly wave trend for BTC/USD. As the BTC/USD chart shows, the wave trend began to bottom around June and has since been trading in a flat line. If the price were to fall further, it would have already done it by now. It clearly shows that there is no room for a short term price break below $5,800. The only way the price would break and close below $5,800 would be if it were to begin a new trend.
The wave trend between October and December last year was in a similar flat line. It fell only to begin a correction that lasted more than eight months. If the same were to happen again, that would mean the beginning of a correction lasting for another eight months. This would have to invalidate the general trend of October to December being the bullish period for crypto markets. In addition to that, we will have to break below critical levels and break key structures. The moment we formed the monthly candle for October, the possibility of a fall below $5,800 for a bullish case has ceased. A lot of analysts seem to think the price could just drop to $4,000 and rebound strongly from there. That is not true, at all. Let us examine why.
This is the monthly chart for BTC/USD
which as big as the big picture could get. Let us discuss the first observation pertaining to our point from before. If we look at this chart, there are five candles closely above the 21 Month EMA (purple line). For the last four months, these candles have tested the 21 Month EMA but have remained above it. In addition to that, the price of BTC/USD has remained above the 21 EMA since 2016! Looking at this chart, you can see for yourself what a fall below $5,800 would mean. That would be doing something we have not done for the last two years. This is the reason why Bitcoin (BTC) has not done this so far. If the price falls below $5,800, you can kiss any bullish scenario goodbye as the market will be forced to enter another correction.