Back Above $6K: Bitcoin's Bull Reversal Is a Work in Progress

Bitcoin has regained poise over the weekend after a drop below $6,000 last week, but a short-term bullish reversal is still not confirmed.

BTC was expected to remain on the defensive and drop to fresh 2018 lows below $5,755 over the weekend, having closed below $6,000 on Thursday.

Further, the repeated rebound from sub-$6,000 levels have established the area below the psychological mark as a significant near-term support.

Still, it is too early to call a short-term bearish-to-bullish trend change, as the bulls are yet to violate the series of lower price highs and lower price lows, as represented by the falling channel seen in the chart below.

BTC created a bullish outside-day candle on Friday and closed well above $6,302 on Saturday, confirming a bullish outside-day reversal pattern.

That said, the probability of an aggressive move above the falling channel resistance, currently located at $6,450, looks high as the cryptocurrency has created a bull flag - a bullish continuation pattern - on the short duration chart below.

A break above the flag resistance of $6,416 would signal a continuation of the rally from the recent lows below $5,800, and would open the doors to $7,065.

Only a bullish falling channel breakout would confirm a short-term bearish-to-bullish trend change.

On the downside, a break below $6,000 would kill the odds of a short-term bullish reversal.

A daily close below $5,755 would revive the bearish outlook and expose support at $5,400.