- Bitcoin nurtures a sideways trading trend above $7,000.
- The inverted head-and-shoulders pattern suggests that Bitcoin could breakout above $8,000 and $8,200.
Bitcoin’s perpetual swap contract on BitMEX has continued to impact sentiment towards the largest cryptocurrency in the industry positively. In the last 24 hours, the contract has attracted $2.4 billion in trading volume. It features a $609 open interest and a funding rate of 0.0037% over the previous seven hours.
XBT/USD 1-hour chart
The 1-hour chart for XBT/USD shows Bitcoin recently staged recovery having hit a dead-end at $7,400. The trading action that followed the resistance has been mostly sideways. Bitcoin continues to fight hard to stay above $7,000.
Meanwhile, the immediate upside is forced to deal with the resistance provided by the 50 Exponential Moving Average (EMA) on the 1-hour chart currently holding ground at $7,114. A glance higher reveals more resistance at the EMA 100 ($7,200). When considering a broader look and taking into account the scope above $8,000, $7,400 supply zone must be disintegrated to pave the way for bullish price action.
The formation of an inverted head-and-shoulders pattern hints that Bitcoin’s price is on the verge of a breakout. An inverted head-and-shoulders pattern is used in classical technical analysis to signal a reversal of the previous downward trend. With the right amount of volume and other supporting indicators, Bitcoin could forge its path above $8,000. Besides, the pattern breakout has eyes on $8,200.
The present technical picture supports a sideways trading action. The RSI is relatively bullish at press time, although it has corrected from highs around 67.61. As long as it maintains a gradual upward motion, BTC will eventually breakout heading towards $8,000.
Bitcoin Key Technical Levels
Support: $7,000, $6,800 and $6,500
Resistance: $7,200, $7,400 and $8,000
RSI: Upward slopping suggests growing bullish strength