Dead Cat Bounce? Bitcoin May Struggle to Hold Above $7K

Bitcoin is looking to regain poise after its drop to two-month lows on Sunday, but the recovery will likely be short-lived, the technical charts indicate.

Further, the long duration charts have turned bearish, so holding on to gains above $7,000 will be a challenge for BTC's bulls.

The recovery could turn out to be a dead cat bounce - a temporary recovery in a bear market that is followed by a resumption of the downtrend.

The failure to beat a less important Fibonacci hurdle only indicates how tough it could be for bitcoin to scale $7,008.

The bearish moving averages could also complicate the recovery in bitcoin prices.

The 50-hour, 100-hour and 200-hour moving averages are all trending south indicating a bearish setup.

The bearish crossover between the 5-month and 10-month MA also indicates the tide has turned in favor of the bears.

The pennant breakdown also adds credence to BTC's bearish close below the 50-week MA in May. And, last but not the least, the charts also show there is a lot of space to the downside as a major support is seen directly at $6,000.

The broader outlook remains bearish with bitcoin likely to test $6,000 in a week or two.

Only a daily close above the 10-day MA, currently seen at $7,376, would abort the bearish view.