After recently flirting with danger below $6,000, bitcoin prices rallied back to reclaim the $6,500 area and some technical analysts say charts for the largest digital currency are bullish.
Some analysts view the decline as a retrace to a consolidation price of $6,000 or even below that level, which the digital currency breached on June 24. Still, cryptocurrency bulls are trying to pinpoint exactly where the selloff pressure might be originating.
“BTC has failed three times in the last 72 hours to hold on to gains above $6,500, with the latest attempt to scale the psychological level failing a couple of minutes before press time. This may force investors to question the sustainability of the recent rally,” reports CoinDesk.com. “But such concerns may be unfounded, as the bullish bias has only strengthened in the last 24 hours, as seen in the technical charts below. As a result, BTC could rise toward $7,000 (psychological resistance) over the weekend.”
Analyzing the Bitcoin Charts
Momentum plays an important role in when to buy bitcoin, but what may be surprising is that buying the cryptocurrency after it has experienced big rallies can be a winning strategy.
Sentiment, including what market participants are saying about bitcoin and other digital currencies online, can also be a solid avenue for timing purchases.
“The relative strength index has witnessed a bull flag breakout – a bullish continuation pattern – which indicates BTC could soon pick up a strong bid and jump to the inverse head-and-shoulders neckline of $6,715,” according to CoinDesk. “Acceptance above that level would open the doors to $7,500 (target as per the measured height method).”
A poll conducted by Gallup-Wells Fargo revealed that 72% of U.S. investors have no interest in ever buying Bitcoin, while 2% currently own the cryptocurrency and 26% are on the fence.
“BTC remains on the hunt of the inverse head-and-shoulders neckline resistance of $6,715. A bullish breakout, if confirmed, would validate the bearish-to-bullish trend change suggested by the 4-hour chart and allow a sustained move above $7,000,” reports CoinDesk.
For more information on the cryptocurrency market, visit the Bitcoin category.