Bitcoin doesn’t appear to be ripe for a bullish break just yet
Bitcoin’s rise to a multi-month high could be part of the consolidation that start a few weeks ago; the short-term uptrend remains intact and what are the key levels to watch?
Bitcoin short-term technical outlook - bullish
Subdued upward momentum associated with the recent jump suggests Bitcoin’s rally is showing some signs of fatigue as it tests a tough hurdle.
BTC/USD hit an eight-month high on Thursday and is now testing a crucial ceiling at the August 2022 high of 25,200, near the 200-week moving average (now at about 24,925). BTC/USD needs to clear the 24,650-25,200 area for the medium-term downward pressure to ease
BTC/USD daily chart
Despite the rise to a multi-month high, the 14-day Relative Strength Index (RSI) failed to mirror the strength. Indeed, the lower high in RSI is a sign that BTC/USD may not be ripe to break past the immediate barrier at 2,4650-25,200 just yet.
In other words, the last week’s jump could be part of the broader consolidation that started end of January, and not the start of a new leg higher.
Bitcoin could continue to remain in the recently well-established range 21,350-25,250 in the interim. Meanwhile, the short-term trend continues to be bullish after it broke in January above resistance on the 89-day moving average (a significant barrier since mid-2022), coinciding with another barrier at the mid-December high of 18,370.
The subsequent break above the 200-day moving average has confirmed that the downward pressure has indeed faded.
However, for the nascent uptrend to continue, Bitcoin needs to clear the 24,650-25,200 hurdle.
This is especially so if the pattern since mid-2022 is indeed part of a broader base building in cryptocurrencies. On the downside, there is fairly strong converged support at 19,800-21,350 (see the daily chart). The short-term upward pressure is unlikely to fade while BTC/USD holds above the floor.
BTC/USD weekly chart
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