Bitcoin Price Sees High-Volume Recovery From Five-Week Lows

Bitcoin's rebound from the five-week low of $6,100 has saved the day for the bulls and kept range-bound trading conditions intact.

AccessTimeIconSep 20, 2018 at 11:00 a.m. UTC
Updated Sep 13, 2021 at 8:24 a.m. UTC

Bitcoin's (BTC) has made a high volume recovery from five-week lows, although a bullish reversal is still not confirmed, technical studies indicate.

The leading cryptocurrency fell to $6,100 on Bitfinex at 18:00 UTC yesterday – the lowest level since Aug. 14 – signaling a downside break of the trendline connecting the June low and Aug. 11 low (lower edge of the pennant).

However, the cryptocurrency picked up a strong bid just an hour later and jumped to a high of $6,550. More importantly, trading volumes on Bitfinex increased by 66 percent during the price recovery.

While the persistent failure to beat the key support could be taken as a sign of bearish exhaustion, the upside is seen gathering pace only above $6,600 (Sept. 14 high).

At press time, BTC is trading at $6,400, representing a 1.10 percent gain on a 24-hour basis.

1-hour chart

btcusd-hourly-chart-6

As can be seen, the big move higher witnessed during the 60 minutes leading up to 19:00 UTC yesterday was backed by a jump in trading volumes. However, so far, the follow-through has been anything but encouraging.

Nevertheless, the strong rebound from $6,100 has established the figure as a key near-term support.

Daily chart

btcusd-double-bottom

Bitcoin remains stuck in no-man's land on the daily chart defined by the lower end of the pennant pattern and the Sept. 14 high of $6,600.

As of writing, the pennant support is located at $6,225. A UTC close below that level would signal a revival of the sell-off from May highs near $10,000.

On the other hand, a move above $6,600 would imply a double bottom bullish reversal. This scenario is looking increasingly likely, courtesy of repeated rebounds at the lower end of the pennant pattern.

View

  • BTC's high volume reversal from $6,100 has raised the odds of a break above $6,600 (double bottom neckline).
  • A double bottom breakout, if confirmed, would open the doors to $7,100 (target as per the measured move method).
  • On the downside, a UTC close below $6,225 (trendline support) may yield a drop to $5,859 (August low) and $5,755 (June low).

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

Bitcoin image via Shutterstock; Charts by Trading View

Disclosure

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

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.