Short of Target: Bitcoin's $1K Rally Still Leaves Bear Bias Intact

View Bitcoin's short-term outlook will remain bearish as long as prices remain below $11,080 resistance.

A break above that level would invalidate bearish lower-highs setup.

The bulls may have a tough time forcing a break above $11,080 amid news of BitMEX exchange facing a regulatory probe and talks of harsher crypto regulation.

Prices could drop below $10,000 in the next 24 hours with daily chart indicators continuing to report bearish bias.

Bitcoin has rallied sharply in the last 24 hours, but the outlook remains bearish with prices holding below key resistance around $11,080.

As of writing, BTC is changing hands at $10,330 on Bitstamp, having clocked highs above $10,770 at 08:00 UTC. The cryptocurrency has come under pressure in the last hour or so amid news that the U.S. Commodity Futures Trading Commission is probing BitMEX, which offers trading of cryptocurrencies with up to 100-times leverage and products such as futures and swaps, over whether it allowed Americans to use its platform.

The latest CFTC probe could heighten regulation fears that have gripped markets over the last few days, making it difficult for BTC bulls to force a break above $11,070.

Further, the relative strength index on the daily chart continues to report bearish conditions with a below-50 print.

The Chaikin money flow index, which takes into account both prices and trading volumes, fell to 0.07 yesterday from 0.08, even though prices rose above $10,000.

On the higher side, a high-volume break above $11,080 would invalidate the bearish setup.