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  • Bitcoin is struggling to cross the 50-day moving average hurdle for the fifth straight day. The repeated failure at that key hurdle has neutralized the bullish outlook put forward by Friday’s falling wedge breakout.
  • A convincing move above $3,630 (50-day MA) would revive the short-term bullish outlook and open the doors to $3,730 – the neckline of a potential inverse head-and-shoulders bullish reversal pattern on the 4-hour chart. A violation there would confirm a bearish-to-bullish trend change and could yield a rally to $4,130 (target as per the measured move method).
  • The bears could make a comeback if the 50-day MA hurdle remains intact for another 24 hours, pushing prices below $3,400.

Bitcoin’s struggle to cross a key moving average lined up above $3,600 is a cause of concern for the bulls.

The leading cryptocurrency by market capitalization is currently trading at $3,575 on Bitstamp, having faced rejection at the widely followed 50-day moving average (MA) hurdle at $3,629 earlier today.

Notably, that average line has been capping upside since Friday, countering expectations of a quick move toward $4,000 built following the high-volume falling wedge breakout.

The sideways action below the 50-day MA has also invalidated the bull flag pattern created on the 4-hour chart over the last three days.

So, the bullish case appears to have weakened and the probability of a drop to levels below $3,400 would rise if the 50-day MA hurdle remains intact for another 24 hours.

Daily chart

As seen above, the odds are stacked in favor of the bulls: the 5- and 10-day MAs are trending north, validating the falling wedge breakout. The 14-day RSI is reporting bullish conditions above 50.00.

Even so, BTC is struggling to find acceptance above the 50-day MA, currently at $3,629. As a result, the bears may feel tempted to hit the market with fresh offers, driving the prices down to the ascending 10-day MA at $3,521.

It is worth noting that the 50-day MA had worked as stiff resistance multiple times in the second half of the last month. As a result, a convincing move above that average is needed to revive the short-term bullish outlook.

4-hour chart

BTC is likely creating the right shoulder of an inverse head-and-shoulders pattern on the 4-hour chart. A break above the neckline resistance, currently at $3,730, would confirm a bullish breakout and could be followed by a move higher to $4,130 (target as per the measured move method).

So, while a break above the 50-day MA would revive the bullish outlook, only an acceptance above the neckline hurdle of $3,730 would put $4,000 back on the table.

Disclosure: The author holds no cryptocurrency assets at the time of writing.

Bitcoin image via Shutterstock; charts by Trading View

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This article is intended as a news item to inform our readers of various events and developments that affect, or that might in the future affect, the value of the cryptocurrency described above. The information contained herein is not intended to provide, and it does not provide, sufficient information to form the basis for an investment decision, and you should not rely on this information for that purpose. The information presented herein is accurate only as of its date, and it was not prepared by a research analyst or other investment professional. You should seek additional information regarding the merits and risks of investing in any cryptocurrency before deciding to purchase or sell any such instruments.