Bitcoin is trending higher on the 4-hour time frame as it moves above a rising trend line connecting the lows since the start of the month. Price is testing this support area and a bounce could take it back to the recent highs.
The 100 SMA is above the 200 SMA to confirm that the path of least resistance is to the upside or that the climb is more likely to gain traction than to reverse. However, price is already below the 100 SMA dynamic inflection point as an early indicator of bearish pressure. The 200 SMA is just below the trend line to add another layer of support in the event of a bigger dip.
Stochastic is already turning higher after a brief stay in the oversold region, indicating that bullish pressure is picking up. RSI is also moving up, so price could follow suit as buyers return. Resistance could be tested at the $10,700-10,800 area next.
Bitcoin is still under some downside pressure as risk appetite appears to be returning in financial markets. Coronavirus concerns are easing, leading to a rebound in stocks and commodities while traders move funds away from cryptocurrencies.
Still, it’s worth noting that there is a lot to look forward to with bitcoin, particularly with its halving approaching. Cutting the mining rewards in half could potentially double the coin’s value, as shown in previous instances, so traders are likely to position ahead of this event in May.
Meanwhile, a return in risk aversion could also prove bullish for bitcoin if coronavirus cases and casualties worsen. For now, it seems that stimulus from China and the possibility of easing measures in other Asian nations affected could keep global growth and overall risk-taking supported.
Images courtesy of TradingView
