$7K Back in Play? Price Indicators Shift In Bitcoin Rally's Favor

Since hitting an annual low of $5,785 in June, bitcoin has increased roughly 15 percent against the U.S. dollar, and technical indicators suggest the cryptocurrency might not be calling it quits just yet.

With a close of $6,584, the day arguably saw control slip back into the hands of bears eager to drive prices lower.

Bears couldn't further capitalize as price followed the rejection by entering a narrow trading range of less than $250 over the following two days.

Still, several technical indications suggest positive sentiment is building and that prices could comfortably rise above $7,000 in the coming days.

After rejecting from the 0.236 Fibonacci retracement level the bitcoin price has formed the continuation pattern of a bull flag.

What's more, the CMF, an indicator used for displaying buy and sell pressure, shows buy pressure is mounting while price is traveling down the flag.

On a wider lens, the price of bitcoin recently found support on the 75-week exponential moving average for the second time in two years, granting bulls more time to cross their next hurdle - the descending trend line of resistance.

A convincing break of the inverse head-and-shoulders pattern and the $6,800 level would likely send price to the test the fast approaching trendline and potentially break it.

Since technical analysis is largely self-fulfilling prophecy, breaking the widely recognized trendline would increase overall bullish sentiment, potentially setting scope for prices in the higher end of the $7,000 range.

View: An upside break of the current bull flag could breach the $6,800 level, causing the inverse head and shoulder pattern to take effect and potentially put bitcoin on the path to $7,000 - $7,400 in the coming days.