Bitcoin (BTC) is teasing a decent bullish move, having cleared a crucial resistance a few hours ago.
The leading cryptocurrency moved past $6,400 earlier today, singling the bearish exhaustion as indicated by Tuesday’s spinning bottom candle is paving way for a corrective rally.
Notably, the positive price action is preceded by a solid defense of the long-term trendline connecting the June low and Aug. 11 low and an upside break of the symmetrical triangle.
As a result, the stage looks set for an upside move. However, caution is still the name of the game as the bearish moving averages (MAs) could work as stiff hurdles and complicate the recovery.
At press time, BTC is changing hands at $6,450, having clocked a high of $6,490 earlier today, according to Bitfinex data.
The symmetrical triangle breakout, as seen in the above chart, indicates a bullish reversal, meaning the sell-off from the recent highs above $7,400 has ended and the bulls have regained control.
Further, the 50-hour and 100-hour MAs are beginning to curl up in favor of the bulls. So, while there is a reason to be optimistic here, the downward sloping (bearish) 200-hour MA is warning the bulls against being too ambitious.
Over on the daily chart, the persistent bear failure to penetrate the lower end of the pennant pattern is finally yielding a bullish move. A UTC close today $6,400 would further cement the short-term bullish case.
However, as of writing, the downward sloping (bearish) 10-day moving average, is putting brakes on the price rally.
- The bullish price action on the hourly and daily chart indicates BTC could test the 10-week MA of $6,847 in a day or two.
- The bearish moving averages may slow down the pace of the bullish move, but are unlikely to derail the corrective move higher. Moreover, price action always supersedes lagging indicators like the moving averages.
- A downside break of the pennant pattern seen in the daily chart would revive the bearish view.
Disclosure: The author holds no cryptocurrency assets at the time of writing.
Golden compass image via Shutterstock; Charts by Trading View
Article First Published here