Analysis: Bitcoin Holds $7K but Showing Signs of Bull Fatigue

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Bitcoin opened Monday in a positive zone as the Coronavirus pandemic showed signs of peaking.

The top cryptocurrency climbed 5.04 percent to $7,120 per token, confirming its inclination to extend the rebound it started after bottoming out in March. The latest upside move brought its net retracement up by 84.55 percent, which so far is one of the best rebounds noted across the global financial markets.

bitcoin, cryptocurrency, btcusd

BTCUSD up 84% from 2020’s low | Source:, Coinbase

But despite its remarkable gains in over the last three weeks, bitcoin showed signs of bullish exhaustion. So it appears, the cryptocurrency is trending inside a Rising Wedge, a bearish indicator confirmed by the formation of successive higher highs and higher lows. Traditionally, an asset falls hard upon reaching the apex of a Rising Wedge.

That is further possible if one focuses on bitcoin’s daily volume. The trading activity on Coinbase exchange is trending downwards, which is the opposite of the price that is trending upwards. It shows that the latest trend is in control of a smaller number of traders.

Case 1: Bitcoin’s Breakdown

Heading forward, bitcoin could break below the Wedge support trendline and fall by as much as the height of the pattern. A rough measure shows that it is more than $2,000. Therefore, confirming a Rising Wedge breakdown scenario could lead prices down by more than the said figure.

bitcoin, cryptocurrency, btcusd

BTCUSD downside target is near $5,000 | Source:, Coinbase

The near-term trend could see bitcoin continue its rise, with the Wedge’s apex topping towards $8,200. That means we have a long support range available for the next breakdown. Depending on where bitcoin would fall off, it would plunge to anywhere between $4,900 and $6,198.

Meanwhile, day traders could use the Wedge to locate interim long and short opportunities. That said, a bounce-back from the lower trendline could create a decent long opportunity towards the upper trendline. Similarly, a pullback from the upper trendline could have traders a short position towards the lower trendline.

Case 2: Breakout

Fundamentally, bitcoin has the possibility to invalidate the Rising Wedge. The cryptocurrency is trending upwards amidst a looming financial crisis led by the fast-spreading of Coronavirus pandemic. All the leading traditional markets have fallen to their record lows, prompting central banks to announce trillions of dollars of stimulus packages.

Many analysts believe that bitcoin would attract a large amount of capital after the pandemic is over. The cryptocurrency is scarcer than fiat money and therefore serves as a hedge against global central banks’ inflationary measures. That might be one of the reasons why its recovery so far has outrun even Gold, a traditional safe-haven.

bitcoin, cryptocurrency, btcusd

BTCUSD’s upside target is above $10,000 | Source:, Coinbase

Technically, bitcoin is eyeing a bull-run towards $9,100 at least. It could go on up above $10,000.

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