Bitcoin finally broke out of its downtrend as it surged above the descending trend line to signal that a reversal is due. However, price is turning at the $3,800 resistance so a correction to the broken trend line might take place first.
Applying the Fibonacci retracement tool shows where buyers might be waiting. The 61.8% level is closest to the trend line and is also in line with the 100 SMA dynamic inflection point. The 50% level is closer to the 200 SMA and might also serve as near-term support around the $3,600 mark. If any of the Fibs are able to keep losses in check, bitcoin could resume the climb to the swing high and beyond.
However, the 100 SMA is still below the longer-term 200 SMA to indicate that the path of least resistance is to the downside. In other words, there’s still a chance for the selloff to resume. The gap between the moving averages is narrowing, though, so bearish momentum is fading.
Analysts are renewing their bullish forecasts for bitcoin now that price…
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