Bitcoin looks ready to resume its earlier rally as it found bullish energy at an area of interest or former resistance turned support. With that, price could set its sights back on the upside targets marked by the Fib extension tool.
The first target at the 38.2% Fib extension is at $4,110.2 then the 50% level is at $4,215. The swing high lines up with the 61.8% Fibonacci extension at $4,321. Stronger bullish momentum could take bitcoin up to the 78.6% extension at $4,471.2 or the full extension at $4,662.3.
The 100 SMA is above the longer-term 200 SMA to indicate that the path of least resistance is to the upside. In other words, the climb is more likely to gain traction than to reverse. Then again, the gap between the moving averages is narrowing to indicate that bullish momentum is fading. Still, price is above the 100 SMA as an indicator of bullish pressure.
RSI appears to be turning lower after a brief stay in the overbought zone. Turning lower could encourage sellers to return and push bitcoin back to the swing low at $3,400 or lower. Stochastic is still heading up but also testing the overbought zone to signal exhaustion among buyers.
Bitcoin struggled to sustain the bullish momentum throughout February which was seen to be spurred by an improvement in sentiment and upbeat forecasts. Still, there is a lot to look forward to, particularly the launch of Fidelity’s institutional platform that is widely expected to bring in big volumes from banks and funds.
Several analysts are still of the opinion that price is bottoming out, and it also helps that members of the tech industry have been optimistic about the long-term prospects of cryptocurrencies. Traders are likely holding out for concrete developments before piling on long positions from here.
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