BTC Price Stuck in Tight $68K–$71K Consolidation: Upward or Downward Breakout Ahead? (March 26 Update)

The Bitcoin price has been stuck in a sideways consolidation for the last three days, since breaking out of a falling wedge. Will the current trading pattern send the price down to the bottom of the bear flag, or can the measured move out of the falling wedge still take the $BTC price towards the top of the bear flag?

Bearish head and shoulders about to cancel out bullish falling wedge? 

Source: TradingView

The above short-term time frame chart reveals that a battle of patterns is playing out. When the $BTC price broke out of the falling wedge, the measured move was to the top of the green arrow, to which level the price can still go. However, there is also the possibility of a smaller M pattern playing out, which if it breaks to the downside, could take the price to the very bottom of the bear flag.

Looking out a bit further, if the price does rise again from the bottom of the flag, or even if it doesn’t, a far bigger head and shoulders pattern is looming ominously. The extent of the measured move to the downside from this pattern is to around $58,600.

The major horizontal support at $69,000 is once again going to be critical, but not far below this at $67,800 is the ‘point of control’ of the Volume Profile Visible Range indicator (VPVR). This is the level at which most trading activity occurs, so the bulls will need to defend this line at all cost.

Daily indicators starting to break down

Source: TradingView

Moving out into the daily time frame, things do not look any better. The horizontal resistance at $71,300 proved to be too tough this time around for the bulls, and a rejection looks to be taking shape from this level.

There is some good support below, as already mentioned, so we are not at the end of the line just yet. Be that as it may, the Stochastic RSI indicators look to be crossing back down, and worse still, the RSI indicator has fallen out of the channel, has confirmed the breakdown, and appears to be making its way down from there.

Bearish macro trend in firm control

Source: TradingView

Finally, observing the $BTC price in the weekly time frame, one can note that the bearish macro trend looks to be in total control. There is perhaps the possibility of one more spurt to the top of the bear flag, but it is perhaps looking more likely that the price may start to break down from here.

At time of going to press, the $BTC price is down nearly 3%. Every time there is some sort of rally, it always seems to be suppressed before there is the merest chance of a breakout. Yes, the price has made several higher highs and higher lows, but in the grand scheme of things this is just painting the picture of a bear flag, and the price is probably reaching the end of that flag.

At the bottom of the chart, the Stochastic RSI is still looking good, and the RSI shows the tiniest hint of the indicator line above the downtrend, but if the negative price action continues into the end of this week, next week could witness the first signs of a major breakdown. $60,000 looks like a strong support line, bolstered by the 200-week SMA, but the bearish momentum of the price falling out of the bear flag could be enough to break this support. Look out below if it does.

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.