Bitcoin is gaining momentum after a strong bounce off the rising channel support visible on the 1-hour chart. Price has climbed past the first two Fibonacci extension levels and could be looking to test the swing high next.
This is in line with the 61.8% Fibonacci extension level at $4,125. The channel resistance is closer to the 78.6% level at $4,177 and the full extension is at $4,242.3. However, 100 SMA is still below the longer-term 200 SMA to indicate that the path of least resistance is to the downside. In other words, there’s still a chance that bearish momentum could stay on.
Then again, the gap between the moving averages is narrowing to signal weakening selling pressure and a potential bullish crossover. If so, more buyers could be encouraged to jump in and sustain the climb. A break past the channel resistance could spur a steeper climb for [Bitcoin]
RSI is heading lower from the overbought zone to signal that selling pressure is just about to pick up. Similarly stochastic has just recently turned lower from the overbought zone and has plenty of ground to cover before reaching the oversold region, which suggests that sellers could stay in the game for much longer. In that case, another test of the channel bottom around $4,000 could be underway, and a break below this might still spur a reversal.
The strong rebound off the $4,000 key area of interest seems to have been enough to revive confidence in the coin, as well as other cryptocurrencies. Many are still predicting that BItcon could reach as high as $5,500 in May when more developments kick in and central banks are rumored to be stocking up on digital assets as well.
However, this move seems to have been accompanied by low volumes and no actual industry developments, so profit-taking could be as quick as in previous instances.