Bitcoin (BTC) found acceptance above the $7,000 mark over the weekend, boosting the odds of a double-bottom bullish reversal, the technical charts indicate.
The cryptocurrency trapped the bears on the wrong side of the market as it defended the psychological support of $6,500 on Friday, despite a bear flag breakdown, and rose above $7,000 on Sunday.
As of writing, BTC is changing hands at $7,081 – up 0.84 percent for the session, and up 9.8 percent from last week’s low of $6,513, according to CoinDesk’s Bitcoin Price Index.
The positive turnaround is being associated with reports that Wall Street bigwigs or “real whales” are set to enter the crypto waters. Notably, George Soros, the billionaire investor who broke Bank of England in 1992, has given his Soros Fund Management macro investment manager Adam Fisher the go-ahead to trade cryptocurrencies, according to Bloomberg.
Reports are also doing the rounds that Venrock, the venture capital arm of the financial empire began by John D. Rockefeller, is all set to bet on bitcoin.
While the speculation seems to have put a bid under bitcoin, the job is only half done for the bulls, the price chart analysis indicates.
The above chart (prices as per Bitfinex) show that the rally from $6,500 to $7,186 (session high) has neutralized the immediate bearish outlook.
However, BTC bulls need to clear the descending trendline and the double bottom neckline before claiming victory over the bears. The descending trendline hurdle is seen around $7,300 and the double bottom neckline resistance stands at $7,510 (April 3 high).
A close above $7,510 would confirm the double-bottom bullish reversal and allow a stronger rally to $8,500 (target as per the measured height method).
The 5-day moving average (MA) and the 10-day MA are now biased to the bulls. Also, the relative strength index (RSI) has cleared the falling trendline in a convincing manner, indicating BTC could rise to $7,300-$7,510.
And, last but not least, BTC has moved back above the key ascending trendline (drawn from the July low and September low) as seen in the linear-scaled daily chart below.
Bitcoin retakes rising trendline
- The immediate outlook is neutral.
- On the higher side, the key level to watch out for is $7,500. If passed, bitcoin could see a sustained rally to $8,500 (double-bottom breakout target).
- On the downside, the focus is on the April 1 low of $6,425. A close below that level over the next few days could put a slide to $6,000 back on the table.
U-turn sign image via Shutterstock