- Bitcoin’s short-term outlook remains bullish while prices are held above $3,658 (the low of the long-tailed doji created on Feb. 27).
- A break above $4,000, however, could be preceded by a pullback to $3,750 if another rejection at a newfound resistance of $3,900 ends up breaching the bullish higher low of $3,826 on the hourly chart.
- A UTC close below $3,658 would confirm a short-term bearish reversal, although that looks unlikely.
Bitcoin’s repeated failure to beat resistance at $3,900 is a slight cause of concern for the bulls.
Having bounced up strongly from the 100-day moving average (MA) support on Tuesday, bitcoin was expected to make a quick move toward the psychological hurdle of $4,000.
In the last two days, however, the bullish momentum faded near $3,900 – the high of the candle with long upper shadow created on Feb. 28.
Further, the spike to a 12-day high of $3,924 seen earlier today was short-lived with prices quickly falling back to lows near $3,860.
BTC’s inability to force a convincing break above $3,900 may invite selling pressure. That said, the short-term outlook would turn bearish only if prices drop below the Feb. 27 low of $3,658.
As of writing, BTC is trading largely unchanged on the day at $3,880.
BTC witnessed a symmetrical triangle breakout on the hourly chart at 07:00 UTC. The follow-through, however, was bearish with the following candle closing back inside the triangle pattern.
The failed breakout, however, has not done significant damage to the bullish view, as prices have again bounced up from the 50-hour moving average.
That said, a deeper pullback to $3,750 could be seen if another failure at $3,900 is followed by a break below the bullish higher low of $3,826.
As seen above, BTC bounced strongly from the 100-day MA support on Tuesday, restoring the short-term bullish view put forward by the “long-tailed” doji candle created on Feb. 27.
That bullish outlook will remain valid as long as prices are held above $3,658 (Feb. 27 low). A close below that level would open the doors to levels below $3,500. The dip, however, could be short-lived as longer duration indicators are flashing early signs of bull revival.
Disclosure: The author holds no cryptocurrency assets at the time of writing.
Author: Omkar Godbole