Bitcoin (BTC) is flashing green, having convincingly scaled a key technical resistance Monday, and looks set to test the $7,000 mark in the next few days.
At press time, BTC is trading at $6,575 on Bitfinex – up 3.4 percent in the last 24 hours.
The short-term bearish-to-bullish trend change, as indicated by BTC’s break above the significant obstacle of $6,450, will likely entice investors to bargain-hunt, creating an upward pressure on BTC prices.
Hence, BTC could rise to $7,000 in the short-term and extend into further gains if its move toward the psychological hurdle is backed by a sharp rise in the trading volume.
That said, the crypto asset’s 24-hour trading volume stands at $4.61 billion, according to CoinMarketCap, down 8 percent from Monday despite a bearish-to-bullish trend change.
BTC closed (as per UTC) at $6,618 on Monday, confirming a bullish falling channel breakout. Further, the 5-day and 10-day moving average (MA) is biased to the bulls (sloping upwards), having witnessed a bullish crossover over the weekend.
Meanwhile, the relative strength index has moved to neutral (at 50.00) from the bearish territory (below 50.00).
What’s more, the Chaikin money flow (CMF) oscillator, which measures the buying and selling pressure, has turned positive for the first time since May 20 and currently stands at the highest level since May 10. The positive print indicates the money is flowing into bitcoin and adds credence to the bullish falling channel breakout.
BTC witnessed a bull flag breakout on Monday, which signaled a continuation of the rally from Friday’s low below $5,800 and could yield a break above $7,000.
Clearly, the odds are stacked in favor of a rally to $7,000, however, the move may not happen overnight, as the short-duration charts are reporting overbought conditions.
For instance, the hourly chart RSI is rolling over from the overbought territory (above 70.00) as seen in the chart above. Further, the 4-hour RSI is hovering well above 70.00 (in the overbought territory).
The bullish falling channel breakout confirmed a short-term bearish-to-bullish trend change.
BTC looks set to test $7,000 in the next few days.
As for today, we could be in for a minor pullback or a bout of consolidation (sideways trading) as the cryptocurrency is overbought as per the RSI on the hourly chart and 4-hour chart.
Only a daily close (as per UTC) below $6,275 (previous day’s low) would abort the short-term bullish view.