Bitcoin Recovery Shows Promise If Key Support Holds

Bitcoin is still in recovery mode, but the bulls must keep prices above key support seen just below $6,500 to maintain momentum, the technical charts indicate.

Bargain hunters were short in supply and prices fell back below $6,600 at 01:00 UTC today.

While it is too early to call a bottom, the nascent recovery shows promise, with bitcoin holding well above the former support-turned-resistance of $6,425.

As per the charts an unexpected break below $6,480 could pour cold water on the optimism and signal a resumption of the sell-off.

The chart shows BTC has created a bear flag - a bearish continuation pattern.

A break below $6,480 would mean the corrective rally from the recent low of $6,109 has ended and the bear market has resumed.

Further, the 7 percent recovery from the recent lows has lifted the relative strength index well above oversold region providing scope for further sell-off.

What's more, the RSI is teasing a break below the ascending trendline.

Clearly, the odds are high that corrective rally could fall apart below $5,480.

A daily close below $6,000 would only bolster the already bearish long-term technicals and open up downside towards the $5,000 mark.