$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.

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

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…

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