Bitcoin Remains On Hunt For $4.2K Despite Price Consolidation

View Bitcoin's low-volume price consolidation has taken the shape of a bull flag on the 4-hour chart.

The flag breakout looks likely, as the longer duration charts are biased bullish: Monday's high-volume triangle breakout is still valid, while a bullish crossover between the 5- and 10-day exponential moving averages on the 3-day chart indicates a positive shift in market sentiment.

Bitcoin's three-day price consolidation looks to be a bull breather before a continuation of the recent rally to above $4,000.

A 4-hour close above the upper edge of the flag, currently at $3,930, would confirm a bull flag breakout and open the doors to $4,330.

The RSI, currently at 63, is again reporting bullish conditions, as opposed to overbought readings seen three days ago.

Major averages - 50, 100 and 200 - are also trending north indicating a bullish setup.

On the daily chart, BTC has bounced upwards at the ascending 5-day moving average, reinforcing the bullish view put forward by the short-term MA studies.

A high-volume break above $4,000 would bolster the already bullish technical setup and allow a rally to December highs above $4,200.

A less-likely close below Monday's low of $3,614 would abort the bullish view.

Bitcoin image via Shutterstock; charts by Trading View.