4-Hour Analysis:
Big Picture: The prior session’s volatility remained unusually high. Following an extreme sell-off, Bitcoin recovered all of the previous session’s losses and produced a bullish engulfing candlestick pattern. However, this might be due to short-coverings, thus any upside surge should be exploited for aggressive profit-taking. Buyers must build a foothold above the 27,600 mark in order to have sustainable upside.
On the Upside Bitcoin got back a few important intra-day levels; maintaining them now is essential for extending the short-coverings, as losing the regained levels might lead to intense intra-day selling. However, the recent price increase was met with swift rejection from the intraday barrier of 27,415 and the EMA-200 level. Surpassing these, as well as the failing channel resistance around 27,600, could create a moment of excitement for the bulls.
On the Downside Bitcoin may re-test the previously re-established levels of 26,650 to 26,530. Keeping these as supports would significantly increase the probability of another short-covering driven upside. However, if buyers fail to convert this level as support again, price will likely lose momentum and revisit lower supports, putting the initial 25,990 level and recent lows under threat.
