The Bitcoin Retest Is In Progress
On the cusp of a reclaim of a key weekly market structure
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The Weekly Channel
Last week, we described how Bitcoin needed to reclaim key levels in an effort to make its way back into the black Downtrending Channel.
We visualised this with the following red path:
Here's today's update:
Bitcoin has already successfully covered one part of its overall red path, managing to reclaim the blue ~$55850 level as support.
And with the recent Weekly Candle Close above the Channel Bottom (black), Bitcoin is now in the process of embarking on the next leg.
But this leg will only be activated upon a successful retest of the Channel Bottom as support.
This retest is now in progress.
And generally - Bitcoin has covered a lot of ground recently:
When we look at previous Weekly Closes in recent months, BTC often upside wicked into the Channel Bottom (black), treating it as resistance.
Whereas this latest Weekly Close, though it also printed an upside wick, managed to Close above the Channel Bottom, indicating that price wants to reclaim this region as a support.
This retest will be important as it would not only just signal a reclaim of the Channel Bottom as support but it would also enable a move to challenge the series of Lower Highs dating to July (dotted diagonal):
Breaking those Lower Highs is necessary if price wants to rally across the black Downtrending Channel like it has done over the past several months; breaking the Lower High series would mean that that downtrend is over and BTC will be ready for a new intra-channel uptrend.
It may not be easy to navigate in the short-term however, as the daily timeframe shows:
Because BTC tends to perform volatile retests at the Channel Bottom, and while these volatile retests can be entire downside deviations on the Daily timeframe, on the Weekly these price action could end up as a downside wick as long as BTC Weekly Closes above ~$58000 by the end of the week.
Retest of the Channel Bottom is now in progress and it may be a volatile one.