$6.6K: Bitcoin Price Eyes New Target for Bull Reversal
A move past a key resistance at $6,675 would confirm a short-term bearish-to-bullish trend change in bitcoin.
Bitcoin is showing signs of life, but only a break above key resistance at $6,675 would confirm a bullish reversal, technical charts indicate.
At press time, the leading cryptocurrency is changing hands at $6,470 on Bitfinex – up 10 percent from the 6.5-week low of $5,859 hit on Aug. 14.
However, the break below the key support of $6,000 (February low) was short-lived and prices moved back above $6,100 by UTC close, signaling bearish exhaustion.
More importantly, the follow-through has been positive: BTC crossed Tuesday's high of $6,259 and jumped to $6,649 yesterday, confirming that sellers have likely run dry and bargain hunters are finding the current price too attractive to pass up.
Hence, it seems safe to say that a bullish trend reversal is in progress and would be confirmed if prices take out the inverse head-and-shoulders neckline resistance of $6,675, as seen in the chart below.
BTC is creating the right shoulder of a inverse head-and-shoulders bullish reversal pattern on the hourly chart.
A move above $6,675 would confirm the sell-off from the July high of $8,507 has ended and would open the doors to $7,490 (target as per the measured height method).
That said, the daily and the 4-hour charts show that BTC could attempt a break above $6,675 in the next 24 hours.
As seen in the chart above, the cryptocurrency has pierced the descending trendline, meaning the sell-off from the high of $8,507 has ended. The relative strength index (RSI) has also adopted a bullish bias (above 50.00).
BTC created a bullish inverted hammer candle yesterday, adding credence to Tuesday's long-tailed (bear exhaustion) candle and confirming the cryptocurrency has likely bottomed out at $5,859.
- BTC bulls are slowly gaining ground and could attack the inverse head-and-shoulders neckline resistance of $6,675 in the next 24 hours.
- A break above $6,675, if accompanied by a pick-up in volumes, would confirm a bearish-to-bullish trend change and allow a rally to $7,490. On the way higher, BTC could encounter resistance at $6,924 (50-day moving average), $6,982 (rising trendline hurdle as seen on the daily chart), and $7,162 (100-day moving average).
- Acceptance below $6,180 (previous day's low) would pour cold water over optimism generated by the inverted hammer candle and would shift risk in favor of a drop below $6,000.
Disclosure: The author holds no cryptocurrency assets at the time of writing.
Bitcoin image via Shutterstock; Charts by Trading View
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.
Learn more about Consensus 2024, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.