Bitcoin continues to trend higher as it climbed past a short-term upside barrier around $4,000. The price has since reached the $4,300 level but appears due for a pullback before resuming the uptrend.
A descending trend line can be drawn connecting the lows since December 17 and buyers might be waiting to buy on a dip to this level. Applying the Fibonacci retracement tool on the latest swing low and high shows that the 61.8% level lines up with this trend line and the former resistance that might now hold as support.
In addition, the 100 SMA dynamic inflection point lines up with this area to add to its strength as a floor. This moving average is above the longer-term 200 SMA to indicate that the path of least resistance is to the upside or that the rally is more likely to resume than to reverse. Also, the gap between the moving averages is widening to reflect increased bullish momentum.
RSI is on the move down, though, so there may be some selling pressure in play. This could keep the correction going until oversold conditions are seen. Stochastic is heading south so the price could follow suit while sellers stay in control. Both oscillators have some room to go before indicating oversold conditions, so there’s still a possibility for a break lower.
A candle closing below the $4,000 mark could be enough to draw more sellers in or to lead bulls to close out their positions once more. Some support could still be found at the swing low of $3,775 or the 200 SMA dynamic inflection point at $3,600.
Bitcoin has had a lot of positive developments going for it in the past few days, allowing it to approach the end of the week with one of its best runs so far this year. Of course, the change in sentiment is also drawing more attention from analysts and investors, helping sustain the rally.
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