Bitcoin (BTC) Breakdown or Breakout Imminent: Which Way Will Price Go in December?

The Bitcoin (BTC) price is coming towards the apex of a wedge formed by the downtrend line and the major ascending trendline. If it breaks up, the bull market is still alive, while if it breaks down, a potential bear market beckons. Which will it be?

Max one week left in falling wedge - up or down next?

Source: TradingView

A breakout or a breakdown will have to occur by the end of next week for the $BTC price, and probably, this will come before the price gets to the apex of the wedge, given that historically Bitcoin does not usually wait until the ends of triangles and wedges before making its move.

If the price falls out of the wedge and confirms below, this would be yet another nail in the coffin, and a fairly confident signal that Bitcoin is in a bear market, and has been since the $126,000 all-time high.

On the other hand, if the price punches out of the top of the wedge and confirms above, the bull market may still have legs. Although even in this case, there would still be a lot for the bulls to do in order for real belief to come flooding back into the market.

As things stand, in the short time frame, the $BTC price is holding up quite well. If the current reversal came down to the $90,000 horizontal support, or the descending trendline (faint dotted line), a bounce could take place from either. At this point in time it does look more likely for a breakout rather than a breakdown to take place.

That said, if the price came down to the major trendline and fell through it, confirming on the other side, all bullish bets would be off.

Next bounce could be the one

Source: TradingView

The daily chart shows the falling wedge in its entirety. The descent to the bottom at around $80,000 gave the extra touchpoint to validate the wedge. It now remains for a break to the up or the downside. Although given the importance of the major ascending trendline, this is more likely to win the battle than the top trendline of the wedge pattern. 

Therefore, it may be that the $BTC price does come down further, but once the next bounce materialises, this could be the one that takes the price out of the top of the wedge.

At the bottom of the chart, the MACD reveals the lowest descent for the indicator line in Bitcoin history. Now that it is ascending, and the histogram is green, it may stay this way for an extended period of time.

$94,000 is the major resistance level

Source: TradingView

The weekly time frame is still looking fine for the bulls, even though the cliffedge is not that far away. The candle wick underneath the last red candle body is a long one, and it compares favourably with the last wick-downs for the previous big patterns. They show how strong buying came in once the price had reached what the market considered a bottom on each occasion.

At the current levels, the $94,000 horizontal resistance (blue line) can be seen to be the major level that the $BTC price will need to get above. 

The MACD, at the bottom of the chart, reveals that the indicator and signal lines are falling, but the most recent bar in the histogram has changed to pink from red. Could this be the first signal that things are about to change back in favour of the bulls?

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.