Bitcoin Price Charts Hint at Recovery Rally Above $6.4K

Omkar Godbole
Sep 12, 2018 at 11:01 UTC
Updated Sep 13, 2018 at 12:03 UTC
markets

Bitcoin (BTC) could witness a minor corrective rally if the bulls’ persistent defense of key support leads to a break above the resistance at $6,400, technical charts indicate.

The leading cryptocurrency suffered a downside break of the symmetrical triangle in the early U.S. session yesterday, signaling a revival of the sell-off from the recent highs above $7,400.

Further, the bearish pattern bolstered the already negative setup, as represented by the rising wedge breakdown and the pennant breakdown on the line chart.

As a result, BTC was looking likely to test $6,000 (February low) before the UTC close yesterday. Instead, it bounced back from $6,170 — the support of the trendline connecting the June low and Aug. 11 low — and closed largely unchanged on the day at $6,290.

At press time, BTC is changing hands at $6,250 on Bitfinex and the trendline support is seen slightly higher at $6,180.

Daily chart

As seen in the above chart, the lower end of the pennant pattern – the trendline sloping upwards from the June low – is proving a tough nut to crack. This could be considered a sign of bearish exhaustion, given that the crucial support is holding ground after a 16 percent drop.

That argument has merit since the cryptocurrency created a “spinning bottom” candle yesterday, signaling indecision in the marketplace.

A UTC close today above $6,400 (previous day’s high) would validate the spinning bottom candle, opening doors to a stronger corrective rally toward $6,830 (10-week moving average).

On the other hand, acceptance below the pennant support will likely accentuate the bear case.

View

  • BTC’s repeated defense of the key price support has neutralized the immediate bearish outlook.
  • A convincing break above yesterday’s high of $6,400 would confirm a spinning bottom bullish reversal and could yield a test of supply around the resistance at $6,800 (multiple daily highs).
  • A UTC close below $6,180 (pennant support) would add credence to the rising wedge breakdown witnessed earlier this month and would open up downside towards the June low of $5,755.

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

Chart 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.