Bitcoin still facing the impact of a bearish pennant pattern likely to force it under $7,000.
Bitcoin price recovers $7,200 support but the journey towards $7,400 is laced with numerous hurdles.
Bitcoin is still facing the effects of a bearish pennant pattern. The pennant is classified as a continuation pattern in technical analysis. In this case, its formation follows the drop from $8,000 to lows close to $6,500; the consolidation and the breakdown below the pattern support, suggests that Bitcoin will continue with the downtrend even dropping below $7,000.
Meanwhile, Bitcoin is trading at $7,201 after a long struggle in the region between $7,200 and $7,100. The losses on Thursday retested the support at $7,000 but the bulls worked harder to avert losses into the $6,000 range.
Capping the immediate upside is the 50 Exponential Moving Average (EMA), holding ground at $7,314. Slightly upwards, the 100 SMA is in line to put a stop to the bullish jabs thrown by the buyers. However, if Bitcoin manages to clear the resistance at $7,600, there is a chance that the momentum will rise to levels close to $8,000.
XBT/USD 4-hour chart
XBT/USD price chart by Tradingview
Technically, the futures contract is relatively bullish on Friday. For instance, the Relative Strength Index (RSI) is moving north above 40. The highest the RSI has reached this December is 67.23. If the indicator can close in on 70 (start of the overbought region), BTC could have the potential to scale the levels beyond the moving averages and also test $7,600.
Bitcoin Key Technical Levels
BitMEX index price: $7,210
Volume: $1.1 billion in the last 24 hours
Open interest: $675 million
RSI: Growing towards the average, improving the technical picture.
Support $7,100, $7,000 and $6,800.
Resistance: $7,400, $7,600 and $8,000.
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