Bitcoin Price Charts Hint at Recovery Rally Above $6.4K
Bitcoin (BTC) could witness a minor corrective if the 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 US 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 expected to test $6,000 (February low) before the UTC close yesterday. Instead, it bounced off from $6,170 — 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, it 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 or 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 the crucial support is holding ground after a 16 percent drop.
The argument has merit as 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 $6,830 (10-week moving average).
On the other hand, acceptance below the pennant support will likely accentuate the rout.
View
BTC's repeated defense of the key price support has neutralized the immediate bearish outlook. A convincing break above the 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 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.
Bitcoins image via Shutterstock; Charts by Trading View
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