Bitcoin is starting the week strong. 24-hour trading volumes have virtually doubled from last week's daily averages and are currently averaging around $4.5 billion. This volume increase suggests that bulls may be attempting to reverse Bitcoin's major downtrend.
Key Resistance at $6800
Our resistance zone (around $6800) from previous price analysis is still a major key in making preparation for future price action. Several factors support this price zone:
The 50-day EMA converges at this price. This convergence suggests a strong possibility that price will find resistance at this level, and retrace to find a lower support price.
A long-term downtrend rests at the 100-day EMA. This trendline's convergence with the 100 EMA suggests a fairly strong long-term target of around $7000. Price will have to pass above this target for the market to prove a successful trend reversal.
After the most recent surge in volume, price is looking to find a healthy support level. If price can maintain support at it's current levels, it's possible that a new bull run would push prices above $7000.
The resistance zone at $6800 correlates with a .236 fibonacci retracement from May's highs of nearly $10,000. Furthermore, this area represents a significant obstacle for future price movement based on past market behavior.
Indicators such as the RSI express that BTC has room for long-term growth. In addition, the most recent bull run suggests that an inverse head-and-shoulders pattern is being completed. This pattern is often credited for suggesting long-term trend reversals.
Preparing for Bitcoin Price Confirmations
At this point, entering the BTC market remains a high risk for potential short-term investors. As we approach the $6800 price level, it is very likely that price will once again bounce to test support near $6200. The inverse head-and-shoulders pattern mentioned above, does provide an optimistic scenario for long-term investors. If price can breach above $6800 and find stability, it seems more probable that BTC will once again trade above $7000.
Upcoming news regarding crypto ETFs, which will be determined in August, will play a large role in reversing Bitcoin's trajectory.
