Bitcoin (BTC) Holds Strong Above Bull Flag: Rally coming?

Bitcoin (BTC) has broken out of its bull flag. However, the initial rally was stopped in its tracks and the price action has returned to sit above the $119,000 support level. Is a real rally still on the way?

Could the CME gap down to $117,000 still be filled?

Source: TradingView

A strong rally is probably on the cards for the $BTC price. However, there may be some housekeeping to do first, in the form of a quick dip down to close the recent CME gap that stretches from $119,000 down to just over $117,000.

If the $BTC price did take this particular route, the potential dip would likely coincide with a retest of the top trendline of the bull flag, so probably no harm done.

CME gaps aren’t always filled, but most of the time they are. It just remains to be seen in this particular instance whether the market will want to take off to the upside, or whether it can be held for a last little dip.

$BTC is currently respecting an ascending trendline (faint dotted line), so if the price falls through this line, it could be a sign that a retrace to $117,000 might be about to take place. On the other hand, if the price lifts off from this trendline, and given the strong bullish fervour in the market, it just might not come back.

Horizontal support can favour the gap fill

Source: TradingView

The daily chart illustrates that things are relatively serene for $BTC. That said, the Stochastic RSI indicators are perhaps shaping to turn back down. They have not quite reached the top so this remains to be seen. The blue 50-day SMA is travelling up, and it could act as support again if there was more than a slight dip in price.

Also on the subject of support, it can be seen that the lower part of the horizontal support band would not be far from the bottom of the CME gap. Could these particular stars be aligning?

A very bullish 2-week chart

Source: TradingView

Zooming a lot further out, the 2-week chart continues to look bullish for the $BTC price. In the price action it can be observed that should this two-week period close more or less as is, the current candle will envelop the previous one. If one looks back to the previous bull flag, a similar enveloping candle was what took the price up to the next bull flag.

At the bottom of the chart, the Relative Strength Index reveals that the indicator line is right up against the descending trendline. A breakthrough here would likely result in a strong surge to the upside. Watch this closely.

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.

source: https://cryptodaily.co.uk