The leading cryptocurrency bitcoin has enjoyed some significant gains in the past couple of days. But as things stand now, the ongoing recovery rally faces a major obstacle that could halt its progress towards the psychological price of $5,000.
Market stats shows that the price of Bitcoin jumped to a two week high of $4,108. This move validates the short term bearish to bullish trend change earlier confirmed by technical analysis.
More importantly, the break above the psychological price of $4,000 looks to be gaining more momentum as stats also shows that 24-hour trading volume for BTC has jumped to one-month highs above $8 billion.
As a result, we may see more buyers taking the opportunity and pushing the price upwards. However, the move may stall near $4,400 as that region is packed with key technical lines. As at the time of writing this report, the leading cryptocurrency Bitcoin is trading at $4,040, representing an 8 percent gain in the last 24 hours.
A look at the daily Bitcoin chart above shows:
- That 50-day exponential moving average (EMA) is at $4,402.
- The bearish lower price high of Nov. 29 is at $4,410.
- $4,430 is the 38.2 percent Fibonacci retracement signaled by the sell-off from the Nov. 7 high to Dec. 15 low.
Additionally, the RSI on the hourly and 4-hour chart are printing overbought conditions.
With all these technical indicators, it’s easy to see that BTC will have a hard time breaking through the resistance at $4,400-$4,430 in a single move.
Also, a pullback from its current price of $4,040 will allow the RSI on the hourly and 4-hour chart roll over from overbought conditions and allow the bulls to take over once more. With that, BTC may be able to rally across the stiff resistance at $4,400. And should there be a break across that resistance zone, Bitcoin may experience a quick push to the next psychological price of 5,000.