Bitcoin finally broke out of its short-term descending channel pattern to confirm that the bullish run is gaining traction. On a longer-term chart, this looks like a bullish flag pattern that is a continuation signal.

The 100 SMA is above the longer-term 200 SMA to indicate that the path of least resistance is to the upside. In other words, the uptrend is more likely to gain traction than to reverse.

However, RSI is already indicating overbought conditions and looks ready to move south. This could bring selling pressure back in while buyers take a break, possibly spurring a correction to the Fib retracement levels.

The 61.8% level is closest to the broken channel top around the $3,700 level that might hold as support from here. A shallow pullback could bounce off the 50% Fib at $3,747 or the 38.2% level at $3,775 before climbing back to the swing high and beyond. In a bullish flag pattern, the resulting rally usually lasts by the same height as the flag, which spans $3,450 to $3,760 in this case.

Stochastic has some room to climb before reaching the overbought zone, which suggests that buyers could stay in the game for a little longer and keep the momentum going.

Bitcoin continues to gain upside momentum as the anticipation for the Fidelity institutional platform builds. So far it looks like the March launch date will push through, ushering in big volumes from banks and funds.

The recent upside break would also likely revive more bullish forecasts, which in turn would encourage even more buyers to return and extend the rallies. Recall that it was previously projected that Bitcoin would reach $5,000 in the next ten days, but it has plenty of room to go before hitting that target. Still, the recent price action might be enough to support the narrative that bitcoin has finally bottomed out.

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