Bitcoin price bulls face key breakout test at $93k horizontal resistance

Bitcoin hits $93k after a falling wedge breakout, testing major horizontal resistance as overbought signals, bear flag risk and moving averages clash.

Bitcoin (BTC) price reached the $93,000 level on January 5, encountering a major horizontal resistance point after breaking out of a falling wedge pattern, according to technical analysis.

Bitcoin price retests $93k

The cryptocurrency has been rising since exiting the wedge formation, with the price moving upward through a downtrend line while maintaining support at a major ascending trendline on the 4-hour chart, the analysis indicated. The advance has brought the digital asset to a significant horizontal resistance level where the price appears to have met resistance.

Technical indicators show Bitcoin registering overbought conditions across short-term timeframes extending to the daily chart, according to the report. The Stochastic RSI indicators on all short-term timeframes are at or near their upper limits, the analysis noted.

The daily chart reveals the horizontal resistance line represents an important price structure level, according to the technical assessment. The analysis indicated that a successful break above this level could lead to rapid advancement toward the next major structural resistance, which sits considerably higher.

Several technical factors present challenges for further upside movement, the report stated. Bitcoin remains within a bear flag pattern, with the upper boundary potentially aligning with the horizontal resistance level. Additionally, the 200-day simple moving average is angled downward at an incline not previously seen during the current bull cycle, according to the analysis.

The price has regained the 50-day simple moving average, which shows signs of potentially curling back toward the upside, the report noted.

The weekly timeframe displays a breakout from a falling wedge pattern, a formation typically associated with upward price movement, according to the technical analysis. The Stochastic RSI on the weekly timeframe indicates potential for upside momentum once both indicator lines cross above the 20 level, the report stated.

Historical data from the weekly chart shows that previous instances of the Stochastic RSI moving up from bottom levels were followed by strong rallies, according to the analysis.

The technical assessment emphasized that price direction will depend on the depth of any potential pullback, with a shallow retracement potentially allowing the rally to continue, while a deeper decline to the major ascending trendline could return the price to recent sideways trading patterns.