Bitcoin (BTC) has continued its journey toward of the overhead resistance of $4,255. The bulls have been struggling to scale this level since last December, hence, this is a major hurdle to watch out for.
If the digital currency breaks out and closes (UTC time frame) above $4,255, it will complete a double bottom. This reversal pattern increases the probability of a new uptrend that has a minimum target objective of $5,273.91.
Both the moving averages are sloping up gradually and the RSI is in the positive zone. This shows that the buyers have the upper hand but the current up move lacks momentum.
Contrary to our bullish view, if the BTC/USD pair fails to ascend $4,255, it will remain stuck in the large range of $4,255–$3,236.09 for a few more weeks. After a sharp bear market, the bottoming formation is likely to take a long time. The longer the base, the stronger the eventual breakout from it will be.
However, if the pair breaks down of $3,236.09, it will sour sentiment and can result in a waterfall decline. For now, traders can keep the stop loss on the long positions at $3,500. We shall soon trail the stops higher.