(Kitco News) - Bitcoin looks like it still stuck in a rut but the good news is that the $20k psychological level has been holding firm for a while now. From a pure technical analysis perspective it could have looked like the downtrend would continue after the bear flag formation was broken on 19th August. This could still be the case but the market has been oscillating around the $20k mark rather than pushing through to the next support at the previous wave low of $17,567. A break of the aforementioned support seem to be the only confirmation of the downtrend now as the market has stalled since mid-June.
On the topside, the price will have to break trough the pattern low and then aim for $25,066 to have any hope of a recovery. When we usually see base formations develop they often look similar to the price action we are seeing in this market at the moment. An anchoring point in this current distribution stands at $21,760 as on the lower timeframes that is the next important resistance to break. If the bulls can manage to hold above that zone there could be a rally higher but for now the consolidation low at $17,567 is the level to watch.
