Bitcoin is still treading sideways in a short-term consolidation that looks like a bullish flag pattern. This is around the top of the descending channel visible on the 4-hour time frame, which explains why there is a lot of resistance.
If this area continues to keep gains in check, price could resume the slide to the bottom of the channel or the lows around $3,400. The 100 SMA is still below the longer-term 200 SMA, after all, so the path of least resistance is to the downside.
Then again, the gap between the moving averages is narrowing to signal weakening selling pressure and a potential bullish crossover. If that pushes through, buying pressure could pick up and lead to a break past the flag and channel top of $3,800. From there, bitcoin could be in for a climb that’s the same size as the mast, which spans $3,400 to $3,700.
RSI is on the move down after recently turning lower from the overbought region. However, the oscillator appears to be changing its mind halfway through and could go for another move north. Stochastic is also turning higher without reaching oversold levels, which suggests that buyers are eager to return.
More and more bitcoin analysts are giving bullish estimates for the coin now that price appears to have bottomed out (again) on the recent correction. Of course it remains to be seen whether this kind of sentiment can be enough or not to sustain the gains.
Many say that the jump higher came from forecasts that bitcoin could hit $5,000 over the next ten days. Another analyst mentioned that this year might be the last time that the public can afford bitcoin, which suggests strong gains up ahead. Note that Fidelity is said to launch its institutional platform by March so this could usher in another wave of rallies.