Bitcoin Sets Up for Rally Toward Key $66K Resistance

The $BTC price has finally rallied after worrying investors on Sunday with a dip below the bull market trendline to $62,660. Monday dawned brightly and the price shot up to $64,500. Now becoming overbought on the shorter time frames, will some potential lateral chop turn into a bull flag?

Strong rally to $64,500: bull flag starting to form?

Source: TradingView

After escaping the bear market trendline for the first time in 10 months of trying, the $BTC price did not immediately leap to the upside to a backdrop of triumphal fireworks. Instead, the price flattened out and then slid down the bear market trendline for a few days until this trendline met with the bull market trendline. The downward price action had formed a falling wedge, and it was out of this structure that the price finally rocketed higher. A small double bottom had also formed which probably gave its own signal to the upside impetus. 

After hitting $64,500 the $BTC price was rejected, and this rejection then led to the price coming back to retest the $64K horizontal level which can now potentially become support. If this support holds, it may be that a period of sideways chop will allow the 4hr/8hr/12hr Stochastic RSI indicator lines to come back down and reset. This could form a bull flag with a measured move that could take the price back to the key $65,700 horizontal resistance level.

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