Failed Breakout Revives Bitcoin’s Bull-Bear Tug-of-War

Bitcoin’s retreat from Sunday’s high of $7,779 has poured cold water over the bull mood generated by the weekend’s positive price action and neutralized the immediate outlook.

BTC closed on Sunday (as per UTC) above a key falling trendline resistance level, signaling a short-term bullish-to-bearish trend change. A bullish crossover between the 5-day and 10-day moving average (MA) also favored a short-term positive price action.

However, bitcoin suffered a rising wedge breakdown (bearish pattern) in the U.S. hours on Monday, signaling that the corrective rally from the recent low of $7,040 had ended.

In the end, the failed breakout was no surprise, as low trading volumes had warned of a bull trap.

At press time, the cryptocurrency is changing hands at a four-day low of $7,426 on Bitfinex, down 2.5 percent over 24 hours.

Daily chart

The above chart shows that bitcoin is back inside a falling channel and risks a quick drop to $6,980 (triangle support) if the bulls fail to defend…