Stuck in $300 Range, Bitcoin Awaits Price Breakout

Bitcoin is stuck in a narrowing price range and the direction of the breakout will likely set the tone for the next move in the market, according to technical charts.

The leading cryptocurrency was expected to rise toward 7,000 over the weekend, having moved past a key technical hurdle on Friday.

Clearly, the cryptocurrency is being squeezed in a $300 range and is currently changing hands at $6,400 on Bitfinex - up 0.80 percent on a 24-hour basis.

An upside break of the trading range would signal a continuation of the rally from the Aug. 14 low of $5,859.

As seen in the chart above, BTC has created a narrowing price range, popularly known as the pennant pattern, over the last five days.

As of writing, the pennant resistance is located at $6,595 and the support is seen at $6,320.

A bullish breakout would be confirmed if the 4-hour candle closes above $6,595.

It is worth noting that a downside break of the pennant would push the RSI below the rising channel support and that would only validate the bearish price pattern.

A bull pennant breakout will likely allow a rally to $7,000.

The outlook as per the daily chart would turn bullish if prices find acceptance above $7,067.