- Bitcoin is trapped in a trading range defined by the 200-week simple moving average and the 200- week exponential moving average, currently at $3,404 and $4,106, respectively. Therefore, the outlook as per the weekly chart is neutral.
- A weekly close (Sunday, UTC) above $4,106 would confirm a longer-term bearish-to-bullish trend change and could fuel a rally toward $5,000.
- A weekly close (Sunday, UTC) below $3,404 could revive the sell-off from November highs above $6,500 and allow a drop to levels below $3,000.
- The odds of a drop to the lower edge of the trading range would improve if BTC invalidates a bullish candlestick pattern created on Feb. 27 with a move below $3,658.
Bitcoin is trapped in a key trading range defined by the 200-week simple moving average and the 200- week exponential moving average, currently at $3,404 and $4,106, respectively
The cryptocurrency needs a break above the upper edge needed to confirm a longer-term bull reversal. Conversely, a move below the lower bound of the range could revive the bear market.
Prices fell below the 200-week EMA in the third week of November, bolstering the bearish view put forward by the high-volume breach of the crucial support at $6,000 on Nov. 14.
The ensuing sell-off, however, ran out of steam in mid-December with prices bouncing up from the SMA, then located near $3,100. Notably, that average has served as strong support at least three times in the last three months.
So far, however, seller exhaustion has failed to produce strong buying pressure, as is evident from bitcoin’s repeated failure to break above the EMA over the last 13 weeks.
With prices stuck between key MAs, bitcoin’s immediate outlook as per the weekly chart is neutral. The crypto market leader is currently trading at $3,850 on Bitstamp, representing a 0.4 percent drop on a 24-hour basis.
Weekly chart
On the weekly chart, BTC witnessed corrective rally after defending the 200-week SMA support in mid-December and early February. However, on both occasions, the bounce failed to secure a close above the 200-week EMA.
With several weekly indicators now reporting early signs of bull reversal, the probability of bitcoin confirming a bearish-to-bullish trend change with a weekly close (Sunday, UTC) above the 200-week EMA at $4,106 appears high.
That could pave way for a bullish higher high above $4,236 (Dec. 24 high) and a rally toward $5,000.
Daily chart
The odds of BTC challenging the lower edge of the trading range would rise if prices find acceptance below $3,658, invalidating the bullish long-tailed doji candle created on Feb. 27.
A weekly close below the 200-week SMA at $3,404 could yield a sell-off to levels below $3,000.
Read more at: https://www.coindesk.com/bitcoin-price-trapped-in-key-make-or-break-trading-range
