- Bitcoin pushes above $7,000 in what is believed to Santa finding his way to the crypto space.
- The bulls hold Bitcoin above $7,100 but the upside is capped by strong resistance zones.
Bitcoin made a remarkable comeback into the $7,000 range on Tuesday. The reversal was quite unexpected and in my opinion, it is not fundamentally supported. Nonetheless, BTC bounced off the November lows, breaking several barriers including $6,800, $7,000, $7,200 and $7,400. Despite aiming for $7,600 as I had predicted in the Bitcoin price analysis yesterday, XBT/USD hit a snag at $7,494 (BitMEX contract).
The momentum’s break above the two-months long descending trending trendline poked the bulls who reacted by increasing buy entries. With the upside momentum curbed by strong resistance levels at $7,500 and $7,600, the price dived towards $7,000.
XBT/USD 4-hour chart
At the time of writing, Bitcoin is trading $7,165 after defending the former support at $7,100. Also supporting the price is the 50 Exponential Moving Average (EMA) on the 4-hour chart. However, with the EMA 100 above EMA 50, Bitcoin bears’ presence cannot be ignored.
The Double-bottom pattern
The double-bottom pattern formed when Bitcoin retested November lows contributed to the reversal witnessed on Tuesday. As long as the impact of the pattern remains intact, Bitcoin could sustain gains above $7,000 as it allows the buyers to gather the strength to attack the barriers heading to $8,000.
Meanwhile, the reversal and the growing bearish pressure has the potential to continue, especially with the RSI retreating from the levels close to the overbought. For now, Bitcoin is can continue taking advantage of the increasing pressure to defend $7,000 and forge the next trajectory to $8,000.
Bitcoin Key Levels
BitMEX index price: $7,159
Open Interest: $643 million
24-hour volume: $4.3 billion
RSI: Retreating towards 50; shows growing bearish strength.
Support $7,000 and $6,800
Resistance: $7,200, $7,400 and $7,600.