Bitcoin Awaits Price Breakout As Trading Range Tightens

The price of bitcoin (BTC) is stuck in a $400 range defined by key technical levels, and the direction of the breakout will likely set the tone for the next move in the cryptocurrency.
The trading range’s lower end is $6,341, a double bottom neckline (former resistance-turned-support), which was scaled on June 30. Meanwhile, $6,754 (a 23.6 percent Fibonacci retracement of the sell-off from $9,990 to $5,755), which put brakes on BTC’s rally earlier this week, marks the upper end of the trading range.



A convincing move above $6,754 would signal a resumption of the rally from $5,755 (June 24 low) and would open the doors to $7,000, as indicated by the double bottom breakout and bull flag breakout earlier this week.

On the other hand, the bullish case would weaken significantly if prices find acceptance below $6,341.

That said, the short duration charts indicate the odds are stacked in favor of a downside break of the trading range. At press time, BTC is changing hands at $6,520 on Bitfinex – down 1 percent on a 24-hour basis.

1-hour chart
The bears may feel emboldened by BTC’s transition from rising channel (bullish setup) to falling channel (bearish setup), as seen in the chart above.
Further, Bollinger Bands (standard deviation of +2,-2 on 20-hour moving average) are trending south, indicating a bearish setup.

BTC is also trading below 50-hour and 100-hour moving average (MA), indicating the path of least resistance is to the downside. More importantly, 50-hour MA risks falling below 100-hour MA in the next few hours (bearish crossover).

4-hour chart

The downside break of the rising channel yesterday added credence to the bearish relative strength index (RSI) divergence and strengthened the bear case.
The chart also shows Bollinger Bands that have adopted bearish bias (beginning to fall).

View
BTC risks falling below $6,341 (double bottom neckline – former resistance-turned-support, the lower end of the trading range) as indicated by the bearish setup on the hourly and 4-hour chart.

Acceptance below $6,341 would abort the bullish view put forward by the double bottom breakout, bull flag breakout and bullish falling channel breakout and would shift risk in favor of a drop below $6,000.

On the higher side, an aggressive move above the significant obstacle of $6,754 (23.6 percent Fibonacci resistance) would bolster the already bullish technical setup on the daily chart and open doors to $7,000.



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Author: Omkar Godbole
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$7k? Bitcoin Price Looks North After Six-Day High

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.


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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.
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).


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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.

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.



Here at Dollar Destruction, we endeavour to bring to you the latest, most important news from around the globe. We scan the web looking for the most valuable content and dish it right up for you! The content of this article was provided by the source referenced. Dollar Destruction does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products or other materials on this page. As always, we encourage you to perform your own research!

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Author: Omkar Godbole
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