Bitcoin found support at the bottom of its triangle consolidation visible on the 4-hour chart and is back up to testing resistance again. The sharp bounce suggests that bulls might be in for a stronger attempt to break higher.
In addition, the 100 SMA is above the longer-term 200 SMA to indicate that the path of least resistance is to the upside. In other words, resistance is more likely to break than to hold. In that case, the price could climb by the same size as the triangle pattern, which spans $3,200 to around $4,500. The 100 SMA also lines up with the triangle bottom to add to its strength as support.
RSI is turning lower after recently hitting the overbought level to signal that selling pressure might be due to return. Stochastic still has some room before reaching the overbought level, so buyers might still have a chance at pushing past the $4,200 resistance. If it holds as a ceiling, though, Bitcoin could revisit the triangle bottom at the $4,000 major psychological mark.
A bit of optimism is still in play for the cryptocurrency industry, which was actually off to a pretty good start for the year. Analysts say that if Bitcoin is able to keep its head above $4,000 for the rest of the day then it could have a shot at going for more gains.
However, the catalyst that could propel Bitcoin higher for the next few days remains to be seen. By the looks of it, bulls are still quick to cash in gains at key resistance levels, and the fact that there is a small bounce off the top signals that some took profits already.
Meanwhile, risk appetite has been flipping on and off in the general financial markets, likely affecting demand for non-traditional assets like cryptocurrencies also. This week has no shortage of top-tier events that could impact overall sentiment, so Bitcoin might see a bit more volatility.
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