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Bitcoin begins forming bullish technical formation โ€” is the bottom in?

Bitcoin has been struggling to find any significant and sustained buying pressure in the time following its retrace from its late October highs of $10,600, but its recent surge from lows of $6,500 was the first time in weeks that bulls put up a significant fight against bears.

Bitcoin begins forming bullish technical formation โ€” is the bottom in?
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Bitcoin has been struggling to find any significant and sustained buying pressure in the time following its retrace from its late October highs of $10,600, but its recent surge from lows of $6,500 was the first time in weeks that bulls put up a significant fight against bears.

Analysts are now noting that the price action that has come about over the past several days may be shaping up to be a bullish technical pattern that typically marks the bottom of downtrends. Naturally, this begs the question: is Bitcoin’s bottom in?

Bitcoin Finds Support at $7,000, But Momentum Falters

At the time of writing, Bitcoin is trading up marginally at its current price of $7,200, which marks a slight climb from its daily lows of just over $7,000, but a notable decline from its daily highs of $7,400.

It does appear that Bitcoin has established a fresh trading range between these two price levels, with support at the former and resistance at the latter.

This ongoing bout of sideways trading has come about after BTCโ€™s bulls failed to maintain the strong momentum that was sparked when it tapped $6,500 late last week. The lack of follow-through on this movement may point to underlying weakness amongst buyers and could mean that it was simply a dead cat bounce.

Will an Inverse Head and Shoulders Pattern Send BTC Rocketing Higher?

One potentially bullish factor that should be carefully considered in the near-term is the inverse head and shoulders formation that Bitcoin has been forming over the past week.

Big Chonis, a prominent cryptocurrency analyst on Twitter, spoke about this possibility in a recent tweet, explaining that any notable upside in the near-term could send Bitcoin past a long-established resistance line and confirm the bullish pattern that is currently forming.

โ€œ$BTC – hard not to state the obvious as this could be forming and Inverse H&S but itโ€™s more important for the price to get above the descending line of resistance first that has held for weeks… Right shoulder lows likely not in yetโ€ฆ #bitcoin funding rate gone negative,โ€ he noted while pointing to the chart seen below.

Bitcoin
Image Courtesy of BigChonis

Although it may prove to be an arduous task for bulls to propel BTC past its multi-week descending resistance line, any sustained upward movement could shift the marketโ€™s tides back into the favor of buyers.

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