Bitcoin price has been trading within a tightening range these days. The upside is still capped by the 50-DMA after failed attempts to settle above the $7,000 handle last week. Bulls remain in the game but prefer a cautious and indecisive approach now. In a wider picture, the leading cryptocurrency by market capitalization extends its gradual recovery after a massive plunge witnessed in March.
Despite the persisting volatility in the traditional financial markets bitcoin shows muted dynamics recently which could be a decoupling from the correlation between the digital currency and the S&P 500. The index gained over 3% overnight while bitcoin finished nearly flat and remains around $6,850 on Wednesday.
As a rule, after prolonged trading within a tight range, a breakthrough follows, especially as low volatility is unusual for the cryptocurrency market in general. The question is where the token will go further. Bitcoin could decide on its further direction within the coming days or next week. On the upside, the key resistance arrives around $7,100. The prices need to make a decisive break above this level to confirm the current bullish trend. Otherwise, the coin may correct under $6,700 and even challenge the $6,500 area.
Of note, the longer the cryptocurrency stays below $7,000, the higher the risk of a bearish correction is. In the longer run, bitcoin could gain ahead of the halving and following the event scheduled for May. On the positive side, the prices may regain $7,400 and retarget the $8,000 barrier. On the other hand, the inability to break above the 50-daily moving average could fuel profit-taking and mark a reversal in a short-term bullish trend.
In the immediate term, the largest digital currency will likely continue to oscillate around $6,800. Once below, the nearest meaningful support is expected at $6,500. The daily RSI looks neutral, suggesting the current consolidation will persist in the nearest future.