No Bitcoin breakout yet: Still on the cards, or big rejection coming?

The Bitcoin price has risen again to the $87K horizontal resistance level. A breakout has still not occurred. Is this a tapping on the glass pane of resistance that will eventually break it, or is the resistance going to reject this advance of the bulls yet again? 

Something has to give!

Source: TradingView

The short-term time frame reveals the two channels (bull flags), with the $BTC price in the upper channel and looking to break out to the upside. From the perspective of the bulls, the more often the price rises to the upper trendline of the channel, the better the chances of an eventual breakout.

Looking at the chart from the viewpoint of the bears, lower highs have continued to be made ever since the first candle wick out of the channel just as it started to form. 

Something needs to give, and it may well be during this particular upside move. The Stochastic RSI indicators have turned down, but the RSI indicator at the bottom of the chart still has plenty of room to run, with overbought territory not being entered yet.

Bulls still have the advantage  

Source: TradingView

Zooming out into the daily time frame we can see that the main upside rally is perfectly intact. All we need now is a breakout that heads up and gets above the next stair step for another bout of consolidation, or a rejection that might be the definitive one that leads to the first decent-sized correction.

Given that the trend is up, the bulls still carry the advantage. Furthermore, it’s not like the $BTC price has gone on a mad surge and is now heavily overbought. This rally has been pretty much textbook so far, with the exception that the two bull flags do not have the classic downward tilt that would normally lead to a deeper consolidation.

Be that as it may, the price is inside another continuation pattern, and the continuation has a more likely than not chance of happening.

The tide in bonds needs to turn for Bitcoin rally continuation

Source: TradingView

There are quite a few voices in the trading and investing world that claim that the bear market may not be over yet. Technically, this is true. There is the possibility of a return to the lows given that the bear market is not officially over until the downtrend is definitively broken by a return to get above $97,880.

Nevertheless, calling a bull market here is also a very valid shout, given that the bear market trendline has been broken, and in such a forceful manner.

The probabilities are that the rally will continue. $94K could be a bullish target, although the $BTC price will likely need the tide to turn as regards U.S. bond yields, and for the U.S. stock market to head up to 8,000 points.

A correction will start at some point, and it will probably be a deep one, perhaps taking the form of a much bigger bull flag, or a huge falling wedge, as was the case in the run up to the top of the last bull market. Before we get there, there could be one last rally. 

The RSI is very positive, with the indicator line having broken through a huge two and half year downtrend. As long as the line stays above that downtrend, the overall situation should be bullish going forward.

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.