Bitcoin (BTC) has bounced back above $8,500, but the rally is not backed by decent trading volumes, the technical charts indicate.
The cryptocurrency closed below key technical levels on Thursday, signaling a bearish breakdown, but the sell-off unexpectedly ran out of steam at $7,925 a day later. Subsequently, bitcoin gained more than $500 over the weekend, rising back above resistance at the 50-day moving average.
At time of writing, BTC is changing hands at around $8,530, having clocked a six-day high of $8,644 earlier today.
While last week’s bearish trend seems to have run out of steam (as seen in the charts below), the weekend’s low-volume rally risks trapping the bulls on the wrong side of the market.
The inverse head-and-shoulders breakout indicates short-term bullish trend reversal – i.e. the pullback from the high of $9,990 has ended and the breakout has opened the doors to $9,000 (target as per the measured height method…