Strong Bounce at $6.5K Enough for a Bullish U-Turn?

Bitcoin (BTC) closed the week down at $6,900 having lost around $1,400 or 18.72%. Monday got off to a disastrous start for the bulls, with a selloff in the Asian market session, losing another 5.5% finding lows of $6,500 before the bulls responded with a 13% swing back over $7,300.

As has been witnessed recently, Bitcoin has continued to dictate the valuation across the cryptocurrency market as a whole. Notably, Ether (ETH) briefly traded around $130, but has since recovered and is now attempting to retake $150, up around 6% for the day.

Bitcoin dominance continues to attempt retaking 70% and looks likely to do so in the near future.

With volatility returning to the BTC market, we will take a look to see if this is a relief rally or if there are signs that this is more of a pivotal moment for the number one crypto asset.

Cryptocurrency market daily view. Source: Coin360

Weekly chart

BTC USD weekly chart. Source: TradingView

Bitcoin failed to close the week above the 100-week moving average of $7,400, which has typically spelled trouble for the price of Bitcoin. The 100 and 560-week moving averages are due to cross bullish next week and often price does reverse into moving average crosses, so it is not unusual price action being witnessed.

Price has ultimately found support at a previous highly traded volume node on the Volume Profile Visual Range, or VPVR, just below 65% of the retracement from the 2019 highs of 14K.

The bounce has also come from around the same price point that saw a very strong reaction back in May 2019.

The Moving Average Convergence Divergence indicator, or MACD, still implies that there is bearish momentum. Selling volume was above average last week and the price is trading below the 100-week moving average. So looking at the higher time frames, one would be forgiven for concluding that the outlook remains reasonably bearish.

Daily chart

BTC USD daily chart. Source: TradingView

The daily chart is a little more useful in identifying the trend…

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