Bitcoin bulls continue to charge toward $7,000 but resistance at $6,970 and the possibility of a rising wedge breakdown are weighing on momentum.
On Wednesday Bitcoin (BTC) price surged higher alongside traditional markets which were likely propelled by the Senate’s approval of the $2 trillion economic stimulus bill aimed at providing relief to businesses and workers impacted by the coronavirus pandemic. The price rejected at $6,959, just a stretch away from $7,000 before pulling back to $6,491.
Crypto market daily performance. Source: Coin360
Looking at the shorter time frame, one can see that the price is simply bouncing off the support and resistance trendline of the rising wedge pattern and continuously encountering resistance at $6,970.
BTC USDT 4-hour chart. Source: TradingView
Despite today’s pullback Bitcoin is still notching higher lows and a push above the $6,970 resistance could see the price explode higher to the rising wedge trendline at $7,079.
Traders will also notice that on the 4-hour timeframe the Bollinger Bands have drawn tight as buy and sell volume has tapered off. Typically this a sign that a sharp move is in the making.
BTC USDT daily chart. Source: TradingView
As mentioned in previous analysis, $7,200 is expected to present considerable resistance and if the price can find support then consolidate in this range Bitcoin would be better positioned for a gradual move back into the $8,000 range.
If the price drops below the Bollinger Band moving average ($6,646) then a drop to $6,515 to $6,450 is likely. Below this there is support at $6,200.
A bullish outcome would involve Bitcoin topping $6,800-$6,900 to turn the area to support then breaking out of the rising wedge to exploit the gap on the volume profile visible range at $6,900 to $7,700.
A high volume breakout above $6,900 could the price make an attempt at a higher high above $7,929. $8,000 is likely to be a significant hurdle to overcome as the 50-day moving average and 200-MA are lurking overhead.
A rising wedge breakdown would likely result in the price revisiting the underlying support levels mentioned earlier ($6,515, $6,450, $6,200) and if $6,200 failed to provide support a revisit to $5,850 and $5,500 is on the cards.
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