$6,550: Bitcoin Charts Suggest New Target for Price Rally

Omkar Godbole
Sep 17, 2018 at 11:00 UTC
Updated Sep 18, 2018 at 11:40 UTC
markets

The corrective rally in bitcoin (BTC) could gather momentum if key resistance above $6,500 is crossed on the back of high volumes, according to technical charts.

The leading cryptocurrency witnessed a symmetrical triangle breakout last week, opening doors for a stronger corrective rally towards $6,800–$7,000.

However, despite the bullish setup, BTC was rejected near $6,600 on Friday and spent the weekend trading in a sideways manner in the range of $6,350–$6,550. As a result, the immediate bullish outlook has been neutralized.

Further, trading volumes fell to a two-month low of $3.22 billion on Saturday, putting a question mark on the sustainability of the recovery from the recent lows near $6,100.

That said, the corrective move could resume if the cryptocurrency sees a high volume bullish break from the three-day long narrowing price range.

At press time, BTC is changing hands at $6,490 on Bitfinex – down 0.10 percent on a 24-hour basis.

4-hour chart

As can be seen, BTC has charted a narrowing price range over the weekend. A break above $6,540 (triangle resistance) would signal a continuation of the rally from the Sept. 8 low of $6,119.

More importantly, it would strengthen the bullish case put forward by last week’s bullish relative strength index (RSI) divergence and symmetrical triangle breakout.

On the other hand, a break below $6,380 (lower end of the narrowing price range) would signal an end of the corrective rally.

Daily chart

Over on the daily chart, the bullish crossover between the 5-day and 10-day moving averages (MA) indicates the path of least resistance in on the higher side. So, the cryptocurrency is more likely to extend the corrective rally in the short-run.

View

  • A high volume move above $6,540 (upper end of the range) could yield a sustained rally toward $7,000 (psychological hurdle). On the way higher, BTC may encounter resistance at $6,710 (50-day MA) and $6,750 (100-day MA).
  • A downside break of the narrowing price range would mean the corrective rally from the low of $6,119 has ended and that level could be put to test again.

Disclosure: The author holds no cryptocurrency assets at the time of writing.

Bitcoin image via Shutterstock; Charts by Trading View

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This article is intended as a news item to inform our readers of various events and developments that affect, or that might in the future affect, the value of the cryptocurrency described above. The information contained herein is not intended to provide, and it does not provide, sufficient information to form the basis for an investment decision, and you should not rely on this information for that purpose. The information presented herein is accurate only as of its date, and it was not prepared by a research analyst or other investment professional. You should seek additional information regarding the merits and risks of investing in any cryptocurrency before deciding to purchase or sell any such instruments.