Bitcoin has completed a reversal pattern, breaking through the $7,000 handle after re-testing lows averaging out at the $6,300 level.

The reversal – sometimes called a head-and-shoulders bottom – came after a series of positive events and a slow but steady market rally that led to an uptick in transaction volume and buying interest starting on the 15^th.

Once the H/S pattern completed, the market reacted strongly, pushing the entire class asset up by several hundred Dollars. As indicated in the chart below, volume has been quite high over the last two daily candles. High volume and an expanding spread directly following a period of low volume could hint towards potential accumulation.

From a trading range (TR) viewpoint, the idea of an accumulation trading range is to shake out sellers so that an asset class like Bitcoin can then be pushed towards higher price points without meddlesome bearish resistance or overhanging supply.

While this argument is up for debate and interpretation, it is in the process of ticking certain checkmarks when considering BTC’s recent market activity. Broadly speaking, the volume within the bear-dominated trading range has declined, indicating a steady weakening in seller interest. However, the spread and volume that violently reacted from the weekend lows showed robust buyer interest, completing the market head-and-shoulders reversal pattern.

What’s next?

The next significant obstacle for the bulls to demolish is the $7,700 handle. Historically, this has been a fierce battleground between the bears and the bulls, with a major resistance level established at the 61% macro Fibonacci retracement values.

Since this strong bull-run is so fresh, it’s hard to tell how long it will last, partly because it hasn’t pulled back to re-test seller interest at lower handles.

At the time of writing, the bulls have the ball firmly in their court, and it’s up to them whether they want to press the breaks on the bull train.

That said, it’s clear that most shorters over the last month have been stamped out of the game by today’s rally, which could bring on another round of traders looking to re-short the market.