- Bitcoin price trims gains in the wake of the gains that touched $3,700.
- Bitcoin expected to break out of the bullish flag pattern as long as $3,600 support is reclaimed.
- Bullish momentum is forming above the support at $3,550.
Bitcoin has continued to trim the gains following the incredible rise that touched $3,700 resistance on Friday last week. The entire market reacted in the same way with most cryptocurrencies coming out of the ‘crypt”. BTC/USD, for example, spiked from the support at $3,550 above the pivotal $3,400 before coming to a halt at $3,700.
In the last few days, the largest cryptocurrency by market capitalization has battled to ensure that bears do not breach the short-term support at $3,550. In so doing a bullish flag pattern has formed in the 3-hour range. While BTC is exchanging hands at $3,581 I expect a breakout in the short-term as long as the bulls can pull the price above $3,600.
A look at the chart shows that bullish momentum is forming above the support at $3,550. The Relative Strength Index (RSI) in the same range is fighting to retract from the oversold. The indicator has stayed below 20% for a couple of days now as investors rushed to take profits following the above-mentioned gains. The short-term 50-day Simple Moving Average SMA is above the 100-day SMA indicating that the bulls are gaining ground against the sellers.
Bitcoin must step above $3,700 and aim for $3,800 in order to bring the psychological resistance level at $4,000 in sight. On the flipside, a breakdown looms if the digital asset breaches the support at $3,550. However, other vital support zones are positioned at $3,400 and $3,350 and will come in handy in the event declines extend.
BTC/USD 3-hour chart
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