Bitcoin is still stuck inside a short-term descending channel as it trades around the middle of its symmetrical triangle on the 4-hour time frame. A break higher could confirm the bullish flag formation and take it to the triangle top around $4,000.

The 100 SMA has crossed above the longer-term 200 SMA to indicate that the path of least resistance is to the upside. In other words, the rally is more likely to gain traction than to reverse. These moving averages line up with the bottom of the short-term channel to add to its strength as support.

However, if support breaks, the price could pull back to the bottom of the triangle at the $3,500 mark or even break lower. In that case, Bitcoin could slip by the same height as the chart pattern, which spans $3,400 to around $4,400.

RSI is still heading lower and has some ground to cover before indicating oversold levels. If that happens once price tests the triangle bottom, a return in bullish momentum at that point could lead to a bounce.

Stochastic hasn’t quite reached the oversold levels just yet but is starting to turn higher. This suggests that buyers might be eager to return and push price past the $3,700 mark, which would then be enough to classify as a break from the bullish flag.

The recent rally lost momentum as the price was unable to sustain the rally up to the projected $5,000 mark, which a cryptocurrency expert on Twitter claimed would be reached in 10 days. He made this forecast a few days back and the price hasn’t even come close.

Still, many believe that this could mark the beginnings of a big bounce in Bitcoin as Fidelity moves closer to launching its institutional platform next month. If it pushes through, the pickup in volatility and volumes could be enough to draw more bullish interest in.

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