$7,000? Bitcoin Looks North After Six-Day High

Despite the bearish chart setup, bitcoin rose to a six-day high on Monday, putting a corrective rally to $7,000 back on the map.

The $400 rally may have trapped a few bears on the wrong side of the market, given the pennant breakdown on the 4-hour chart had called for a drop to $6,000.

Yesterday's gravity-defying price action in BTC has boosted the odds of a rally to $7,024.

As seen in the chart above, the 4-hour candle crossed the upper Bollinger band in a convincing manner yesterday, signaling a bullish Bollinger band breakout.

The cryptocurrency has also found acceptance above the 50-candle moving average and the relative strength index is biased bullish.

The positive Bollinger band setup also validates the argument put forward by the bullish price-relative strength index divergence last week that the cryptocurrency has found a temporary low at around $6,100.

BTC closed above the 10-day MA yesterday, invalidating the immediate bearish outlook.

Thus, the probability that the corrective rally will gather traction is high.

View BTC looks set to take out immediate resistance at $6,736 and rally towards $7,024.

A daily close above that level would open the doors to $7,500-$7,600, although the rally could be short-lived as the long-run technicals are still biased to the bears.