Bitcoin bulls are putting up a fight and defending the nearby support around the $4,050 minor psychological level. This lines up with the mid-channel area of interest on the 1-hour time frame and the 38.2% Fib retracement level.
If this keeps holding as support, bitcoin could recover to the swing high around $4,170 or the channel top at $4,200. Stronger bullish momentum could even lead to a break above the channel resistance and a steeper climb. A deeper correction, on the other hand, could last until the 61.8% level closer to the channel bottom and the $4,000 major psychological mark.
This is also near the 200 SMA dynamic inflection point, which is below the shorter-term 100 SMA to confirm that the path of least resistance is to the upside. In other words, the climb is more likely to gain traction than to reverse, so buyers might just be waiting to hop in at better prices on the pullback levels.
RSI is heading up to show that there’s bullish momentum left, but the oscillator is nearing the overbought zone to signal exhaustion. Turning lower could indicate that sellers are about to return. Stochastic has already made it to the overbought zone to show that buyers are tired and might be ready to let bears take over from here.
Renewed bullish expectations and low trading volumes may have propped bitcoin up earlier in the week, but it remains to be seen if the gains can be sustained. After all, traders had been holding out for actual industry developments before picking a clear direction for bitcoin.
Forecasts have been mixed, with some calling for a much larger dip to a bottom around $1,850 before bitcoin is able to pull off a big rebound. Others say that the $5,000 mark might still be reached sometime in May.
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