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Bitcoin is still hitting a roadblock at the $4,100 area but is forming higher lows to signal that bulls are trying harder. This appears to be a bullish pennant formation, with a break past the highs likely indicating that continuation is due.
However, if resistance holds, price could be due for a pullback to the nearby support levels marked by the Fibonacci retracement tool. Price is currently testing the top of the ascending channel seen on the 1-hour time frame and could pull back to the bottom around the $3,800 mark and 61.8% Fib.
A shallow pullback could already draw support from the 38.2% level near $3,900 and the mid-channel area of interest. The 100 SMA seems to be holding as dynamic support also and is above the 200 SMA to confirm that the path of least resistance is to the upside. This means that the climb is more likely to gain traction than to reverse.
The gap between the moving averages is also widening to signal that bullish momentum is getting stronger. The 200 SMA is hovering near the very bottom of the rising channel to add to its strength as a floor in a larger pullback.
RSI still has some room to go on its move south before indicating oversold conditions. This means that sellers could stay in control for a bit longer and keep the correction going until selling pressure is exhausted. Stochastic is also pointing down so price might follow suit while bearish pressure is in play.
Bitcoin has been on a strong run since last week as more and more analysts are sharing bullish forecasts and price has been able to sustain its upside breaks past key technical barriers. This suggests that momentum is on bulls’ side likely spurred by anticipation for a pickup in institutional investments soon.
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