This Bitcoin Price Chart May Give Early Warning of Next Bull Reversal

That bitcoin has likely found a bottom around $6,000 is now generally accepted, so the challenge for investors and traders is to spot the early signs of a long-awaited bullish reversal.

Basic technical theory suggests that a bearish-to-bullish trend change is confirmed after the price invalidates a "Lower highs" pattern - a series of descending peaks.

Bitcoin needs to rise above the September high of $7,400 to confirm a major bullish breakout.

Seasoned traders are always on the lookout for patterns that might allow them to front-run an impending textbook bullish reversal.

In bitcoin's case, the 3-day chart - on which each candlestick represents price action over a 72-hour period - is signaling that the prospects of bullish reversal would rise sharply if prices can clear the former support-turned-resistance of the 50-candle simple moving average.

Notably, the recent lower price high of $7,400 was created at the SMA hurdle, so a break above that resistance could be considered an early sign of bullish reversal.

It's worth noting that BTC's bullish break above the 50-candle SMA in July ended up trapping the bulls on the wrong side of the market.

View The outlook as per the 3-day chart remains bearish as long as prices are trading below the 50-candle SMA of $6,642.

A break above $6,642 would mark the beginning of the long-awaited bullish reversal.

Bitcoin image via Shutterstock; charts by Trading View.