Bitcoin price shows a bearish breaker setup on the weekly timeframe, suggesting that buyers need to be cautious. This signal is ambiguous since it does not accurately predict a reversal just yet. Therefore, a continuation of the ongoing 2023 BTC rally is still possible.

Bitcoin price seems to have formed a definitive bottom in the last quarter of 2022, which has led to an explosive rally. The year-to-date performance of BTC stands at 70%, with a local top of $30.968.

The last leg up in Bitcoin price pushed it into a weekly bearish breaker, extending from $29,247 to $41,273. As explained in detail in a previous article, a bearish breaker setup is a zone where the asset experiences high selling pressure.

The technical formation revolves around two higher highs and the down candlestick between these peaks. After the second higher high is formed and the asset starts to retrace, investors need to pay attention to how the price reacts to the last down candlestick. If the swift breakdown of the valley leads to the creation of a new lower low, it confirms the formation of a bearish breaker.

Now, market participants need to wait for the asset to pull back and retest the breaker to open short positions.

There are two paths that Bitcoin price can take from here:

A resumption of the bull run, which extends the rally followed by and potentially forms a local top at the breaker’s midpoint at $35,260 or the range high at $41,273.

If Bitcoin price continues to head higher, it will encounter a confluence of a Fair Value Gap (FVG) and the bearish breaker’s midpoint. The FVG, marked in orange, extends from $34,277 to $37,406, which is a perfect place to book profits and anticipate a local top formation. In case BTC climbs higher, it will likely form a top at $41,273, which is the breaker’s upper limit.

Bitcoin will be bullish after bearish correction

Apr 22 2023