Bitcoin is back to testing the top of the symmetrical triangle visible on the 4-hour chart, perhaps making another attempt to break higher and sustain an uptrend.
A strong close above the $4,100 to $4,200 area could be enough to confirm that bulls have won the upper hand and could push for a climb that’s the same height as the triangle. This pattern spans $3,200 to around $4,400 so the resulting climb could take it up to $5,400 and beyond.
The 100 SMA is still above the longer-term 200 SMA to indicate that the path of least resistance is to the upside. This suggests that resistance is more likely to break than to hold. The moving averages are also close to the bottom of the triangle to add to its strength as support. Still, a break below the $3,800 mark could spur a slide that’s also the same size as the triangle.
RSI turned lower after recently reaching the overbought zone, indicating that selling pressure is about to kick into high gear. This oscillator has plenty of room to head south before indicating oversold conditions, which means that bears could stay in control for much longer.
Stochastic is also on the move down to show that bearish momentum is in play. The oscillator is just about to cross the center line to confirm the presence of selling pressure. With that, another dip to the triangle support could be possible.
Light trading volumes are seen to be the primary factor that propped up bitcoin, along with the slight improvement in sentiment as nearby support levels have once again been defended.
There doesn’t seem to be a major catalyst supporting the recent bounce, so there’s still a pretty good chance that the gains could be unwound as more traders and analysts weigh in. Many acknowledged that sentiment remains bullish, at least based on recent social media activity. Some maintain that the $5,000 target could be hit by May.