$6.6K: Bitcoin Price Eyes New Target for Bull Reversal

Here is some interesting news from CoinDesk: $6.6K: Bitcoin Price Eyes New Target for Bull Reversal

Bitcoin is showing signs of life, but only a break above key
resistance at $ 6,675 would confirm a bullish reversal, technical charts indicate.

At press time, the leading cryptocurrency is changing hands at $
6,470 on Bitfinex – up 10 percent from the 6.5-week low of $ 5,859 hit
on Aug. 14.

However, the break below the key support of $ 6,000 (February low)
was short-lived and prices moved back above $ 6,100 by UTC close,
signaling bearish exhaustion.

More importantly, the follow-through has been positive: BTC crossed
Tuesday’s high of $ 6,259 and jumped to $ 6,649 yesterday, confirming
that sellers have likely run dry and bargain hunters are finding the
current price too attractive to pass up.

Hence, it seems safe to say that a bullish trend reversal is in
progress and would be confirmed if prices take out the inverse
head-and-shoulders neckline resistance of $ 6,675, as seen in the chart
below.

Hourly chart

BTC is creating the right shoulder of a inverse head-and-shoulders bullish reversal pattern on the hourly chart.

A move above $ 6,675 would confirm the sell-off from the July high of
$ 8,507 has ended and would open the doors to $ 7,490 (target as per
the measured height method).

That said, the daily and the 4-hour charts show that BTC could attempt a break above $ 6,675 in the next 24 hours.

4-hour chart

As seen in the chart above, the cryptocurrency has pierced the
descending trendline, meaning the sell-off from the high of $ 8,507 has
ended. The relative strength index (RSI) has also adopted a bullish bias
(above 50.00).

Daily chart

BTC created a bullish inverted hammer
candle yesterday, adding credence to Tuesday’s long-tailed (bear
exhaustion) candle and confirming the cryptocurrency has likely bottomed
out at $ 5,859.

  • BTC bulls are slowly gaining ground and could attack the inverse
    head-and-shoulders neckline resistance of $ 6,675 in the next 24 hours.
  • A break above $ 6,675, if accompanied by a pick-up in volumes, would
    confirm a bearish-to-bullish trend change and allow a rally to $ 7,490.
    On the way higher, BTC could encounter resistance at $ 6,924 (50-day
    moving average), $ 6,982 (rising trendline hurdle as seen on the daily
    chart), and $ 7,162 (100-day moving average).
  • Acceptance below $ 6,180 (previous day’s low) would pour cold water
    over optimism generated by the inverted hammer candle and would shift
    risk in favor of a drop below $ 6,000.

Disclosure: The author holds no cryptocurrency assets at the time of writing.

Bitcoin image via Shutterstock; Charts by Trading View

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Source: CoinDesk.com

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