$7k? Bitcoin Price Looks North After Six-Day High

Despite the bearish chart setup, bitcoin rose to a six-day high on Monday, putting a corrective rally to $7,000 back on the map

Jun 19, 2018 at 9:45 a.m. UTC
Updated Sep 13, 2021 at 8:04 a.m. UTC

Despite the bearish chart setup, bitcoin (BTC) rose to a six-day high on Monday, putting a corrective rally to $7,000 back on the map.

The leading cryptocurrency unexpectedly picked up a bid around $6,450 at 16:00 UTC yesterday and rose to $6,850 – the highest level since June 12, according to Bitfinex data.

The $400 rally may have trapped a few bears on the wrong side of the market, given the pennant breakdown on the 4-hour chart had called for a drop to $6,000.

Yesterday's gravity-defying price action in BTC has boosted the odds of a rally to $7,024 (23.6 percent Fibonacci retracement of the sell-off from $9,990 to $6,108). However, the long-run outlook remains bearish for now.

At press time, bitcoin is changing hands at $6,700 on Bitfinex.

4-hour chart

CoinDesk - Unknown

As seen in the chart above, the 4-hour candle crossed the upper Bollinger band in a convincing manner yesterday, signaling a bullish Bollinger band (standard deviation of +2 and -2 on 20-candle moving average) breakout.

Trading volume also picked up (circled on chart), adding credence to the bullish move. Meanwhile, the cryptocurrency has also found acceptance above the 50-candle moving average (MA) and the relative strength index (RSI) is biased bullish (above 50.00).

So, BTC will likely clear the immediate resistance at $6,736 (yellow dotted line) and test supply around $7,024 (23.6 percent Fibonacci retracement of the drop from $9,990 to $6,108) in the next 24 hours.

It's worth noting that the descending (bearish) 100-candle MA is located at $7,045, marking a key resistance level for the bulls.

The positive Bollinger band setup also validates the argument put forward by the bullish price-relative strength index (RSI) divergence last week that the cryptocurrency has found a temporary low at around $6,100.

Daily chart

BTC closed above the 10-day MA yesterday, invalidating the immediate bearish outlook. It also created a bullish outside-day candle on Monday (price action engulfed Sunday's high and low) – that is, the day began on a pessimistic note, but ended optimistically. Thus, the probability that the corrective rally will gather traction is high.

View

  • BTC looks set to take out immediate resistance at $6,736 and rally towards $7,024 (23.6 percent Fibonacci retracement of the drop from $9,990 to $6,108).
  • A daily close (as per UTC) above that level would open the doors to $7,500–$7,600, although the rally could be short-lived as the long-run technicals are still biased to the bears.
  • Bearish scenario: A sell-off to $6,000 could still happen this week, if BTC closes (as per UTC) below the 10-day MA ($6,582) today.

Compass image via Shutterstock

The Festival for the Decentralized World
Thursday - Sunday, June 9-12, 2022
Austin, Texas
Save a Seat Now

DISCLOSURE

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

Trending

1
CoinDesk - Unknown
Sequoia's Guide to Surviving the 2022 Bear Market

Venture capitalists have gotten increasingly frantic over the last few months.

Venture capitalists have gotten increasingly frantic over the last few months.

CoinDesk - Unknown
2
CoinDesk - Unknown
NFT Art Museums Are a Good Idea

The metaverse turns galleries global, and helps fund the arts. This article is part of “Metaverse Week."

The metaverse turns galleries global, and helps fund the arts. This article is part of “Metaverse Week."

CoinDesk - Unknown
3
CoinDesk - Unknown
How the US Can Establish Itself as a Crypto Leader

Regulators have an opportunity to map out thoughtful, strategic policy on stablecoins and beyond.

Regulators have an opportunity to map out thoughtful, strategic policy on stablecoins and beyond.

CoinDesk - Unknown
4
CoinDesk - Unknown
No, the UK Is Not Going to Make USDC and USDT Legal Tender

For “legalize” read “regulate.”

For “legalize” read “regulate.”

CoinDesk - Unknown