Bitcoin (BTC) today had its second breakout of the week and has engaged some important resistance levels. Now, with the breakout out of the way, so to speak, we start to consider if we are seeing a new trend forming – or just seeing a pause in the MTF downtrend.

Starting from the 4-hour chart, we see a clear breakout from the neckline of a head-and-shoulders pattern. Bitcoin is being held within clear support at the red bar, and is now trending above all the local EMAs (55 in purple).

Not enoughBTC chart by TradingView

This makes two complete legs in the LTF uptrend; and here it gets interesting, because two legs is enough for a typical correction but not enough for a full impulse wave. What this means in English is: what we are seeing here is still within the scope of the larger (MTF) downtrend. In order to vanquish that downtrend, Bitcoin would have to put in another leg to the upside and take out some (more) key levels, and hold them.

On the 4-hour with indicators, we see bullish signs. The RSI has no bear divergence whatsoever, and the histogram is arching up nicely in a bullish expansion. Based on this, we may well see that third leg up soon.

Strong RSI and histogramBTC chart by TradingView

Finally, on the daily chart, we see that Bitcoin has chewed above the 55 EMA and is bouncing off of the 21 EMA. Closing above the 55 EMA today would be a significant milestone in this LTF trend, and would definitely give the market confidence in a last leg up.

About $9,500 is needed to reset the MTF trendBTC chart by TradingView

We can see here what Bitcoin is up against in terms of the MTF trend. This entire block of red resistance needs to be taken out to clear it, as well as the downtrending (dotted) resistance lines. This would mean taking and holding roughly $9,500 or thereabouts.

This relief rally has been grand, but we need more in order to declare a return to a full uptrend consistent with the HTF uptrend. We could see a rejection here, and Bitcoin sent back down $8,000 or lower at any moment. But having said that, things look pretty good for the bull case today.

The views and opinions expressed here do not reflect those of and do not constitute financial advice. Always do your own research.

Featured Image Credit: Photo via