Bitcoin's Defense of $6K Raises Odds of Relief Rally

Bitcoin is again trading above $6,000 and looking up, but today's closing price will likely set the tone for the rest of the week.

The failure to capitalize on the drop, despite the long-run bearish technical setup, suggests that the bears are feeling exhausted, having pushed BTC lower by more than 40 percent in the last seven weeks.

A relief rally may be in the offing, although it all depends on where prices close today.

BTC created a doji candle on Sunday, normally signaling indecision in the marketplace.

A notable relief rally could be in the offing if BTC closes today above $6,250, confirming a bullish doji reversal.

A positive price action today would also confirm a bullish divergence there.

A confirmation of bullish doji reversal and bullish price-RSI divergence would improve the odds of a falling channel breakout.

While the short-term outlook stays bearish while BTC is stuck inside the falling channel, the short duration chart does favor a relief rally in bitcoin.

The bullish price-RSI divergence only adds credence to Sunday's doji candle and suggests BTC will likely close today above $6,250 today, confirming a bullish doji reversal.

View A close today above $6,250 will likely allow BTC to trade on a positive note for the rest of the week.