Bitcoin (BTC) remains in bullish territory today, but a major break above the long-term descending trendline has been elusive.
That failure on the part of the bulls means the cryptocurrency needs a major move above $8,300 soon to lessen the risks of another sell-off. The trendline resistance is around $8,285 currently.
However, soon before press time, BTC was closing in on that target level and changing hands at $8,226 on Bitfinex (up 1.4 percent on a 24-hour basis). So, the next few hours are likely to determine the pattern going forward.
As the chart above shows, BTC is trading in a tight range ($8,032-$8,285) this morning, but is holding well above the ascending (bull-biased) 10-day moving average (MA), currently at $7,824.
The price action witnessed in the last few days also indicates the cryptocurrency has found acceptance above the $8,000 mark, with repeated rebounds from sub-$8,000 levels highlighting a strong dip mentality in the market. So, it is safe to say, the bias remains bullish.
That said, a convincing break above the long-term falling trendline must happen soon to keep the bulls in the game.
It is worth noting that BTC failed to clear that key hurdle on April 17 and another rejection could prove costly for the bulls, the four-hour chart below indicates.
On the chart above, BTC looks to be creating a head-and-shoulders reversal pattern with neckline support at $7,830.
Failure to take out the trendline hurdle in the coming hours would shift the odds in favor of a drop below $7,830 – a move that would confirm a head-and-shoulders bearish reversal and signal that the rally from the April 1 low of $6,425 has ended.
A bear reversal would open the doors to $7,510 (former resistance turned support) and even $7,200 (target as per the measured height method).
Such a pullback would likely be short-lived, however, as the 50-day, 100-day and 200-day moving averages (MAs) are trending northwards, indicating a bullish setup, and BTC looks more likely to cross the trendline resistance in a convincing manner soon.
- A high-volume break above $8,300 would confirm a long-term bearish-to-bullish trend change and open the doors for a move toward $8,800 (10-week MA).
- Repeated rejection at the key trendline hurdle would boost the odds of a deeper pullback to $7,510-$7,200.