Bitcoin (BTC) is trading close to the 38.2% fib extension level but we have yet to see a strong move above or below it. There have been some wicks to the downside that shook out most of the aggressive retail bulls waiting for a break above the falling wedge. However, the price still remains in indecision and it is possible for the price to fall to the bottom of the falling wedge before we see a move to the upside. It is important to note here that BTC/USD is very likely to go up from here even if it trades sideways or falls further into the wedge. That being said, I do not see this breakout to be anything significant. Even the most ambitious of bulls are not really going to buy this minor correction as the precursor to a big rally past the previous all-time high.
A lot of traders are on the same page here at this point in time. The bears remain bearish long term and short term whereas the bulls expect a retracement short term so they are bearish as well. For most bulls, the price has to come down to at least $7,200 or the 61.8% fib extension level before it can rise further. These next few months are going to be very important as far as the bullish resolve is concerned. A lot of these overly optimistic bulls are expecting the price to fly after a minor correction between $7,000 and $10,000. When we finally see that invalidated, a lot of these bulls are going to panic sell that will drag the price down to $4,500. Then another big move to the upside is going to get a lot of people excited until that fails. This has been happening over and over again throughout this bear market and most retail traders keep on falling for it.
If we take a look at the weekly chart for BTC/USD, we can see that it has already declined below the rising wedge but we have yet to see a sharp decline because the 38.2% fib extension level continues to serve as support. It would be nothing out of the ordinary for the price to decline to the 21 Week EMA any time now. Alternatively, we could see the price continue going up form here but I think the bulls are definitely in a position to push the price above $10,000 from here.
The daily as well as the weekly RSI for BTC/USD indicates that there is room to the upside. We are very likely to see that move as long as BTC/USD respects the 38.2% fib extension level. If the price declines below this level, then we are going down to the 21 Week EMA and possibly the 61.8% fib extension level before we could see a move to the upside. Looking at the weekly chart, we can see that the price has room to shoot up and test the trend line support turned resistance once more before it begins its downtrend below the 38.2% fib extension level.