Bitcoin (BTC) is trapped in a no man’s land between $6,200 and $6,600, technical charts indicate.
The bear flag breakdown witnessed on Monday was supposed to yield a drop to $6,000 (February low). However, the trendline connecting the June low and Aug. 11 low spoiled the bear party.
The leading cryptocurrency bounced off the trendline support of $6,202 on Monday and rose back above $6,350 in the last 24 hours, neutralizing the immediate bearish outlook.
At press time, BTC is changing hands at $6,320 on Bitfinex – up 1.23 percent on the day.
While BTC’s defense of the trendline support is encouraging, a bearish-to-bullish trend change would be confirmed only after BTC has moved above the Sept. 14 high of $6,600.
As can be seen, the trendline from June lows or the lower end of the pennant pattern has worked as a strong support this month and is the level to beat for the bears.
As of writing, the pennant support is located at $6,225. A UTC close below that level would confirm a pennant breakdown – a bearish continuation pattern – which would signal a revival of the sell-off from the May highs near $10,000.
Further, the breakdown could prove costly, as the relative strength index (RSI) of 41.00 (bearish and well above oversold levels) shows plenty of scope for a price drop.
Meanwhile, on the higher side, a move above $6,600 (Sept. 14 high) would negate Monday’s big bearish outside-day candle and confirm a short-term bullish reversal…