Bitcoin might be ready for a longer-term climb as it forms an inverse head and shoulders pattern on its 4-hour time frame. Price has yet to test and break past the resistance but if it does, bitcoin could be in for a climb that’s the same height as the chart formation.
The 100 SMA completed a crossover above the 200 SMA to indicate that the path of least resistance is to the upside. In other words, the uptrend is more likely to gain traction than to reverse from here. Also, the moving averages are holding as dynamic support and could keep doing so.
The neckline is located at the $4,400 mark and a break higher could spur an uptrend that’s at least $1,200 in size. Stochastic is pointing up to show that buyers are in control, likely giving price enough energy to sustain a climb. RSI is also on the move up so bitcoin might follow suit while buyers have the upper hand. This oscillator might be nearing the overbought zone, though.
Bitcoin has a few good things to look forward to this year, including Fidelity’s platform that would serve institutional clients. Strong inflows from big institutions and funds could keep volumes and activity supported in the months ahead, encouraging bulls to reestablish their long positions as well.
A number of analysts are also pointing out that 2018 was merely the year of a correction for bitcoin and that there are a number of signs that suggest that price is bottoming out. It might need a few positive developments to sustain any rallies as traders are still showing some hesitancy in terms of holding on to long positions.
Apart from that, there are expectations that stronger demand from China could once again lift bitcoin throughout the year. A survey by blockchain company PANews published by local crypto news outlet 8btc.com indicated that 40% of 4,200 respondents said they would be willing to invest in bitcoin or cryptocurrencies in the future.
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