Bitcoin's Sideways Drift Has Shifted Price Recovery Target to $3.7K

The follow-through to that bullish breakout has been extremely weak with prices unable to challenge the highs above $3,700 hit last Friday.

Bitcoin risks falling to $3,400 if the latest wedge breakout fails and prices find acceptance below $3,531.

So weak has been the follow through to the wedge breakout that prices have failed to challenge even the highs above $3,700 seen last Friday.

A convincing move above that resistance would put the focus back on the high volume falling wedge breakout and open the doors for a stronger corrective rally.

The bears may feel tempted to hit the market with fresh offers if the sideways action continues over the weekend, which could push price toward $3,400.

BTC created a bullish outside reversal candle on Feb. 8, meaning the price action seen during that three-day period engulfed the highs and lows of the preceding three days.

A move above $3,711 would confirm a short-term bearish-to-bullish trend change and open the doors to levels above $4,000.

On the 4-hour chart, BTC is currently trading above the upper edge of the falling wedge - a breakout indicating a resumption of the rally from lows below $3,400 seen on Feb. 8.

The positive move means BTC could confirm the bullish outside reversal with a move above $3,711 over the weekend.

The bears will likely capitalize and drive prices back toward $3,400 if the breakout fails and prices move below $3,531.