Bitcoin is up more than 4% and it broke the key $6,500 resistance area against the US Dollar. BTC price is forming a solid bullish trend and it could soon rally towards $7,000 or $7,200.

Bitcoin started a fresh increase after testing the $6,200 support area against the US Dollar.

The price is up close to 5% and it surpassed the $6,500 and $6,600 resistance levels.

There is a short term contracting triangle forming with resistance near $6,650 on the hourly chart of the BTC/USD pair (data feed from Kraken).

The pair is likely to continue higher above the $6,650 and $6,800 resistance levels in the near term.

Bitcoin Gaining Traction

Yesterday, we saw a few bullish signs above $6,200 for bitcoin against the US Dollar. BTC price corrected a few points from the $6,600 resistance area, but it remained well bid near the $6,200 support area.

It traded as low as $6,159 and recently started a fresh rally. The bulls gained strength and were able to push the price above the key $6,400 pivot area. More importantly, there was a break above yesterday’s highlighted bullish flag pattern with resistance near $6,370 on the hourly chart of the BTC/USD pair.

It opened the doors for more upsides and bitcoin rallied above the $6,500 and $6,600 resistance levels. The price is up more than 4% and it traded to a new weekly high at $6,714.

It is currently consolidating gains above $6,600 and it is well above the 100 hourly simple moving average. An initial support is near the $6,580 level or the 23.6% Fib retracement level of the recent rally from the $6,159 low to $6,714 high.

There is also a short term contracting triangle forming with resistance near $6,650 on the same chart. If there is an upside break above the triangle resistance and $6,700, the price is likely to rally again. The next major resistance is near $6,800, above which the bulls are likely to aim $7,000 or $7,200 in the near term.

Downside Correction?

If bitcoin fails to clear the triangle resistance and $6,650 or $6,700, it could extend its downside correction. The first key support is near the $6,435 level since it is near the 50% Fib retracement level of the recent rally from the $6,159 low to $6,714 high.

The next major support is near the $6,290 level and the 100 hourly SMA, where the bulls are likely to take a strong stand.

Technical indicators:

Hourly MACD – The MACD is currently moving nicely in the bullish zone.

Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is currently well above the 60 level.

Major Support Levels – $6,580 followed by $6,435.

Major Resistance Levels – $6,650, $6,700 and $7,000.

Take advantage of the trading opportunities with Plus500

Risk disclaimer: 76.4% of retail CFD accounts lose money.