Dead Cat Bounce? Bitcoin Charts Show This Rally Could Be Different

Bitcoin is building on Friday's sharp recovery from lows below $5,800, indicating the corrective rally has more substance than what many presumed to be another "Dead cat bounce."

Overall, the premier cryptocurrency jumped to $6,661.

The broader market followed suit, as it usually does when bitcoin flexes its muscles.

Looking ahead, the broader market may remain solidly bid as the world's largest cryptocurrency by market capitalization looks set to test the $7,000 mark, courtesy of a bullish continuation price pattern, as seen in the charts below.

Having faced rejection at flag resistance in Asian hours, the cryptocurrency was expected to revisit flag support.

The subsequent bull flag breakout, as seen in the chart above, signaled a resumption of the rally from Friday's low below $5,800, temporarily silencing the "Dead cat" critics.

What's more, the bullish breakout is accompanied by a rise in volume.

BTC cleared the falling wedge resistance on Friday, signaling a short-term bear-to-bull trend change.

Further, a bullish follow-through to Sunday's inside bar, as seen today, only validates Friday's falling wedge breakout and indicates better times ahead for BTC. View: The high volume bull flag breakout seen in the hourly chart has likely put bitcoin on the path to $7,000, proving Friday's rally to be the beginning of something more substantial than initially thought.

Acceptance below $6,275 would abort the short-term bullish view.