Commodity Blog

Bitcoin price could set its sights higher as it gains more traction on its bullish breakout, aiming for $7,000 level which is likely the next target. The following technical analysis focuses on Bitcoin price for the short-term timeframe.

As was mentioned yesterday, Bitcoin price continues trading in a narrow range over the weekend without any significant breakthrough upward or downward, although traders and investors are in expectation of a sharp break for several days now.

According to Bitfinex Exchange, the digital coin is trading at $6,550 level as at 12:12 GMT with a market cap of $114.78 Billion. Looking back to the past two weeks,  Bitcoin traded between $6,750 and $6,250 zone. The data shows that Bitcoin is being squeezed in an ever-narrower price range.

This trading pattern signifies that both the bulls and bears are staying on the sidelines and providing little directional bias to the price. The price of Bitcoin represented a marginal 0.50% gain over 24 hours and even just 1% over a week.

Bitcoin Price Technical Analysis

A Harami Cross Bearish candlestick pattern has emerged in 1M time-frame which indicates a bullish reversal from this point for the short-term timeframe. After a long black candlestick at the low end of a downtrend, a white candlestick opens higher or at the previous candlestick’s close and closes at or around its open.

The Harami pattern is more definite than the basic Harami indicator and it shows a reversal for the bullish trend. The smaller the second candlestick, the stronger the reversal signal is.

Further, the weekly chart reveals that Bitcoin was able to defend the $6,200 level in the third week of December. Nevertheless, there has been no significant upward move to follow through. Moreover, last week Bitcoin created a “Doji” candlestick pattern. This, however, signals indecision for Bitcoin price movement.

Additionally, the 100 SMA line is above the longer-term 200 SMA line which signals that the path of least resistance is to the upside. That is to say, there is a possibility of a bullish rally to resume than to reverse.

Still, StochRSI (14) seems ready to change direction downwards after coming close to overbought levels. The above-mentioned indications show that buyers are getting exhausted and that sellers might be eager to return and push the price downwards. A pullback to the bottom of the channel around $6,600 is visible. A larger dip could take the price of Bitcoin back to the triangle bottom around $6,400-$6,500 marks.

Relative Strenght Index (RSI) (14) on the daily charts is pointing down to indicate that sellers are ready to return. However, if Bitcoin bulls keep pushing the prices through this current zone, then the virtual currency might make its way to the channel top at $7,000.

Hence, for the short-term, Bitcoin price might face small corrections near $6,500-$6,400 levels. Nevertheless, in monthly time-frame, the price of Bitcoin might boost towards $7,000-$7,200 zones.

If you have any questions and comments on Bitcoin today, use the form below to reply.