Bitcoin Prices Stabilize Above $6K

Bitcoin has made a 6 percent recovery from the 90-day low hit on Wednesday, neutralizing the immediate bearish outlook.

The subsequent recovery to $6,500 levels currently is hardly surprising and indicates that bitcoin may have found a temporary bottom around $6,100.

Long-run technical setup remains bearish and the battered bulls will want to see a stronger evidence of bear exhaustion before hitting the market with fresh bids.

The market could remain directionless over the next 48 hours and bargain hunters may chip in later if the cryptocurrency looks stable around $6,500.

While prices fell to $6,108 yesterday, the RSI created a higher low, signaling a bullish divergence.

The stage is set for a corrective rally, although the upside is seen gathering steam only if bitcoin manages to hold above $6,425 for next 24 hours.

The daily moving averages seen here are also pointing south, and the broader outlook remains bearish as long as bitcoin is trapped inside the falling channel.

While charts show early signs of bear exhaustion, the long-term outlook is still poor for the bulls, as indicated by the pennant breakdown and the bearish crossover between 5-month and 10-month MAs.

The probability of a corrective rally to $7,000 and above would rise if the price holds above $6,425 for the next 24 hours.

Bearish scenario: Repeated failure to hold above $6,425 despite the bullish price RSI divergence could yield a drop to $6.000.