Bitcoin recently busted through the top of the descending triangle on the 4-hour time frame and is forming a bullish flag pattern to signal that a continuation of the climb is due.

The 100 SMA crossed above the longer-term 200 SMA to indicate that the path of least resistance is to the upside or that the climb is more likely to gain traction. In addition, the 100 SMA is close to the broken triangle top to add to its strength as potential support around $11,000 in the event of a retest.

RSI is on the move down, though, so selling pressure might pick up from here. A larger pullback could last until the 200 SMA dynamic inflection point or even the bottom of the larger triangle at $9,700. Stochastic also seems to be on its way down after turning south from the overbought zone, but the oscillator is treading sideways at the moment. This could be indicative of further consolidation or even an early return in bullish momentum.

BTC/USD Chart – TradingView

Optimism for bitcoin seems to be picking up based on longer-term market factors, including the global easing cycle spurred by persistent trade tensions. Combined with the approaching bitcoin halving in May 2020, during which the rewards to miners will be cut in half, these factors would likely support further price gains.

For now, it appears that the pickup in risk aversion that’s been hurting traditional assets these days is lifting demand for better-performing ones like cryptocurrencies. Stocks and commodities have been sliding deeper in the red as businesses adjust their outlook to account for potential retaliatory measures from China that could wind up extending the ongoing economic slowdown.

To top it off, geopolitical risks all over the globe such as tensions in the Middle East and the odds of a no-deal Brexit are also discouraging traders from putting funds in traditional markets.

Images courtesy of TradingView

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