Bitcoin (BTC) may be up slightly at the start of Friday’s session, but it remains to be seen if it can build traction above $6,000.
The world’s largest cryptocurrency by market capitalization is now down 37 percent from its May 5th high at $9,996 according to CoinDesk’s Bitcoin Price Index, though it’s rebounded to a crucial support zone at $6,235, according to Bitfinex data.
The figure is notable, as it could be argued bitcoin needs a daily close above the previous low at $6,070 to abort bearish outlook for the coming week. This would provide greater confidence to the market as a whole, and could possibly spark another minor bullish revival seen over the last eight days.
And so far in today’s session, it appears a bullish reversal pattern might be playing out.
The inverse head and shoulders pattern as reported by CoinDesk yesterday continues to remain in play as the bears were unable to push the right shoulder below the neckline located at $6,064, adding to the strong possibility of a head-and-shoulders reversal.
Provided the H&S pattern stands, the Fibonacci Retracement tool (taken from previous high on May 5 to July 12 bottom of the current bullish reversal candle) shows significant resistance awaits at $6,400, $6900, $7,021 and $8,046.
The 55 exponential moving average (red line) also remains well above the current price, which suggests the troubled crypto remains bearish in the long term until prices start to crash through the crucial $7,000 resistance zone.
Further, the channel between $6,070 and $7,012 remains an incredible uphill battle for the world’s most infamous digital cryptocurrency.
Relative Strength Index (RSI)
The Relative Strength Index (RSI) on the daily so far offers some solace to back the current H&S reversal which is currently bouncing from the 41.8 point line, previously seen as resistance.
If it holds above and remains within the channel (between 41 and 53) another attempt to push toward previous resistances at $6,472 could be possible.
- Bitcoin risked falling below the current inverse H&S neckline around $6,073 but has since recovered slightly to keep the pattern in play.
- RSI has yet to dip significantly – adding room for further upward momentum
- Acceptance below $6,000 would invalidate bullish technical setup.
- Bulls would like acceptance above $6,400 to abort short-term bearish perspective.
Disclosure: The author holds USDT at the time of writing.
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