Bitcoin is still stuck in consolidation for yet another day, but bulls are finding hope in the fact that price was able to hold its head above $4,100 again. Besides, another attempt to break past the near-term resistance appears underway.
Recall that bitcoin created an inverse head and shoulders on its 4-hour time frame and this is a classic reversal signal. A break past the neckline at the $4,400 mark could be enough to confirm that a longer-term climb is in the works, possibly lasting by the same height as the chart formation.
At the same time, price is consolidating inside a somewhat symmetrical triangle formation whose breakout could also provide clues on where price might be heading next. Note that the triangle spans $3,200 to around $4,500 so the resulting move could be of the same height.
RSI is turning lower to signal that sellers are regaining control and could stay on top of the game for a bit longer since it has a lot of ground to cover before hitting oversold levels. Stochastic is just making its way down from the overbought zone so there is plenty of room for more declines.
Still, the 100 SMA is above the longer-term 200 SMA to indicate that the path of least resistance is to the downside. In other words, support is more likely to hold than to break and resistance might also be broken. Also, the moving averages line up with the triangle bottom to add to its strength as support.
So far bitcoin is holding up quite well, although there is still some degree of caution among market participants. Support levels are being defended strongly by bulls and the higher lows signal increasing pressure, but traders also seem quick to book profits at key resistance levels. For now, markets might be in wait-and-see mode for a catalyst that could sustain longer-term gains.
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