Bitcoin recently broke to the upside of a short-term range, signaling a continuation of the uptrend. However, momentum has yet to pick up and bulls seem hesitant for now.
The 100 SMA is above the 200 SMA to indicate that the path of least resistance is to the upside or that the climb is more likely to gain traction than to reverse. The gap between the indicators is widening to reflect stronger bullish momentum, and price has been finding support at the 100 SMA dynamic inflection point.
Volume remains subdued as traders appear to be holding out for the next big catalyst before piling on long positions. ADX is also below 25 to confirm market consolidation.
Stochastic is still heading higher to reflect the presence of bullish pressure, but the oscillator is already closing in on the overbought region to signal exhaustion among buyers. Turning lower could show that sellers are about to take over. If so, another pullback to the range may be in order.
Bitcoin could see more upside now that the halving is near, although many have argued that this phenomenon has been priced in for quite some time. This could lead to massive profit-taking during the actual event before a longer-term rally ensues.
Also, analysts have compared the recent weak breakout to a similar pattern in 2008, which was followed by a sharp drop in price before a slow recovery. Still, it’s worth noting that bitcoin traded back above the $8,000 in the weeks that followed back then.
Risk appetite remains a key factor in driving bitcoin prices these days as the cryptocurrency appears to be tracking the performance of higher-yielding assets like stocks and commodities. Earnings data are worth watching throughout the week as this could impact overall sentiment.
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