Bitcoin has pulled back from a local top of $65,400, shedding about $2,250, but the selling pressure appears to be fading. Multiple technical indicators are now pointing to a potential rally, with the next major target sitting at $73,000 if the move gains traction.
The setup on the daily chart
After breaking above the bear market trendline, the price has tested and retested that line, holding above it so far. A smaller descending trendline is currently guiding the price lower, and a break through that could open the door to the $66,600 horizontal resistance level.
The Stochastic RSI is about to cross above the 20.00 level, a signal that often marks the start of upward momentum. The daily chart suggests a bounce is likely from current levels, or from the bull market trendline if the price dips a bit further.
Momentum signals turning
The Relative Strength Index has fallen out of a wedge pattern, but a similar pattern in a previous rally saw the trend falter before continuing higher. That history is giving some traders reason to hold their positions rather than cut losses.
On the weekly time frame, the current candle may close red, but the next one is likely to be green if the price doesn't sink much lower. The MACD is also supportive, with both the signal line and the MACD line still rising from an all-time bottom. The MACD line sits above the signal line, which is a bullish setup, and the histogram's green columns are slowly increasing. They're expected to grow larger if the rally takes off.
The $73K target
If the price breaks through the descending trendline and clears the $66,600 resistance, the next stop is $73,000. That's a significant level, and getting there would require the momentum signals to keep improving over the coming sessions.
For now, the path of least resistance appears to be up, but the market still needs to prove it can hold the trendline. The coming days should show whether the bounce has enough behind it to reach that target.
