Bitcoin has held $6,200 for the past two days, but is struggling to move up. Both moving averages are sloping down and the RSI is also in the negative territory. This shows that the sellers are in command.
A break of the $5,900–$6,075.04 support zone will complete two negative formations, a head and shoulders pattern and a descending triangle pattern. Though head and shoulders is primarily a reversal pattern, it can also work as a continuation pattern, as is the case currently.
The lower levels that can offer some support are $5,450 and $5,000. However, after a break from such a major support, a number of stops will be hit, resulting in a quick drop. Therefore, we suggest traders avoid catching the falling knife if $5,900 breaks down.
If the bulls defend the support zone and push price above the moving averages, the BTC/USD pair can rally to $6,900 and $7,400. We suggest an aggressive buy on 50 percent of the desired position size on a close (UTC time frame) above $6,600.
The remaining positions can be added after the digital currency closes above the downtrend line of the descending triangle.
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