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Bitcoin Price Still Seeking Buyers Despite Passing Key Trendline

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Bitcoin’s price remains in a tight range below $6,500 despite recently breaching a key price hurdle.

The leading cryptocurrency cleared the resistance at the trendline drawn between the July 25 and Sept. 4 highs on Oct. 10., yet the bullish breakout failed to put a bid under BTC, leaving it directionless in a narrow range of $6,476–$6,376.

At press time, BTC is changing hands at $6,395 on Coinbase.

The U.S. stock markets fell sharply yesterday triggering a flight to safety across the globe. The heightened risk aversion, as represented by a 3 percent drop in the S&P 500, could be bad news for bitcoin as the cryptocurrency is still considered a risky asset. The blue-chip index has been leading the bitcoin market by 12 hours or more over the last few weeks.

As a result, a range breakdown cannot be ruled out. However, if BTC continues to show resilience in the next few hours, then the prospects of a range breakout would improve. Even so, a bullish reversal would be confirmed only if prices climb above $6,810, as discussed earlier this week.

Daily chart

Bitcoin Price Still Seeking Buyers Despite Passing Key Trendline

The bulls’ inability to capitalize on the violation of the falling trendline could be down to the fact that the breakout was a sideways breach – generally considered a sign of indecision in the marketplace.

As a result, attention has shifted to last week’s high of $6,810, which, if scaled, may allow a sustained rally to the September high of $7,402.

4-hour chart

Bitcoin Price Still Seeking Buyers Despite Passing Key Trendline

A break below $6,376 (lower edge of the range) could embolden the bears, driving prices down to key support at $6,230 (horizontal line on the above chart). Acceptance below that level would expose the next major support: the 21-month exponential moving average (EMA) lined up at $6,121.

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Monthly chart

Bitcoin Price Still Seeking Buyers Despite Passing Key Trendline

Over on the monthly chart, BTC seems to have carved out a bottom along the 21-month EMA. However, the 5-month and 10-month EMAs produced a bear cross last month. As a result, a break below the 21-month EMA cannot be ruled out as long as BTC is trading below the 10-month EMA of $7,114.

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  • A range breakout could happen if BTC continues to defend support at $6,376 despite the risk aversion in the stock markets. A break above $6,476, if confirmed, would open the doors to $6,810.
  • A range breakdown, if confirmed, would shift risk in favor of a drop to $6,230 and $6,121 (21-month EMA).
  • A weekly close (Sunday’s close as per UTC) above last week’s high of $6,810 would put the bulls in a commanding position.
  • A monthly close below the 21-month EMA will likely prove costly.

Disclosure: The author holds no cryptocurrency assets at the time of writing.

Bitcoin image via Shutterstock; charts by Trading View 

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