Bitcoin’s break earlier this month above a four-year moving average has raised the odds that the medium-term downward pressure is fading. However, the unwinding of a year-long slide could be prolonged and bumpy.

Earlier this month, BTC/USD rebounded from near strong converged cushion at 19500-21400 (including the 200-day moving average, the 89-day moving average, and the lower edge of the Ichimoku cloud on the daily charts. Within the overall context, the retreat in February was part of the consolidation and not a reversal of the uptrend.See the previous update highlighting the key support area and the overall bullish bias.

Chart Created Using TradingView

The subsequent break above the February high of 25250 to a new nine-month high also coincided with a move above the 200-week moving average. The rise above the four-year average has raised the odds that the medium-term downward pressure is fading. (See the mid-January updatefor more details.) Importantly, the developments on charts in recent weeks confirm that cryptocurrencies are in the process of building a base. (See the mid-November update).

Chart Created Using TradingView

BTC/USD is now testing yet another ceiling: the June 2021 low of 28800, coinciding with the 89-week moving average, near the top end of a rising channel from the end of 2022. A negative momentum divergence (rising price associated with a stalling in momentum) implies that the rally is showing signs of fatigue in the near term.

Chart Created Using TradingView

Any break below immediate support at Monday’s low of 26525 could open the way toward the 200-period moving average on the 240-minute chart (see chart). For the nascent upward trajectory to reverse, BTC/USD would need to fall below the early-March low of 19540. Until then, the ‘two-steps-forward-one-step-back’ nature of recovery could continue.

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--- Written by Manish Jaradi, Strategist for DailyFX.com

--- Contact and follow Jaradi on Twitter: @JaradiManish