Bitcoin's (BTC) bulls are struggling to push prices higher, despite a still-favorable short-term set-up on the technical charts.
Bitcoin rose to a six-day high of $6,580 on Monday on Bitfinex, adding credence to indications that the cryptocurrency could be in for a relief rally.
The bullish bias has strengthened further in the last two days too, courtesy of a bullish Bollinger band breakout and a bullish crossover between the 5-day and 10-day moving average (MA). Furthermore, bitcoin refused to embrace the negative narrative on Wednesday after the $31 million hack of South Korea's Bithumb exchange, indicating that the sellers are likely running dry.
Despite all this, though, the cryptocurrency has struggled to find acceptance above $6,800 in the last 72 hours, as seen in the chart below.
Bitcoin printed intraday highs above $6,800 in the last three trading days (as per UTC), but still closed well below the $6,800 mark.
The repeated failure to scale $6,800 in a convincing manner forces us to consider the possibility of the bears making a comeback, although the charts do not see that happening while BTC is holding above $6,550.
At press time, BTC is changing hands at $6,730 on Bitfinex.
The chart shows BTC has created a rising wedge – a bearish continuation pattern. A break below $6,550 (rising wedge support and 50MA support) would put the bears back in the driver's seat and allow a drop to $6,000.
A drop below $6,550 would also push the relative strength index (RSI) below the ascending trendline, further strengthening the bear case.
- The immediate outlook remains bullish as long as bitcoin is holding above $6,550.
- On the higher side, stiff resistance is noted at $6,943 (100-candle MA on 4-hour chart) and $7,000 (psychological hurdle).
- A downside break of the rising wedge pattern (below $6,550) would open the doors to $6,000.
- A daily close (as per UTC) below $6,000 would expose the next major psychological support of $5,000.
Bitcoin image via Shutterstock