Bitcoin is still consolidating in its triangle pattern visible on the 4-hour chart after recently getting rejected at $4,200. Price looks ready for another test of support that lines up with several potential inflection points.
For one, a short-term ascending channel is forming as price made higher lows and higher highs. This coincides with the 100 SMA dynamic inflection point that adds to its strength as support. After all, the 100 SMA is above the 200 SMA to confirm that the path of least resistance is to the upside or that support is more likely to hold than to break.
RSI is turning lower after recently hitting the overbought zone to signal that selling pressure is returning. This could keep a lid on gains for the time being until oversold conditions are met. Stochastic is also just heading south from the overbought zone to confirm that bearish pressure is about to pick up. Both oscillators have some ground to cover before hitting oversold levels, which means that sellers could stay in control for a bit longer.
So far it appears that it’s mostly market optimism propping up bitcoin, although it’s helpful for bulls to note that the coin has managed to keep its head above the $4,000 mark for the trading day. This could be enough to support the narrative that price has bottomed out from its slide and is just waiting for the right catalyst for a big upside move.
Analysts have also maintained mostly bullish forecasts, and minor developments have been positive. For one, the Winklevoss twins have reaffirmed their commitment to a bitcoin ETF in a recent Reddit AMA, but of course there is a lot of work cut out for them before they see it to fruition.
Other than that, overall sentiment in the financial markets could determine whether or not bitcoin can edge higher for yet another day.