Bitcoin Shows Signs of Distribution as Price Approaches $7,000

Well, I previously said the new COVID-19 reality was a trading range between $3,000 and $6,000 USD. That analysis has summarily been disproven, as price has broken above resistance at $6,031, and is now testing resistance near $7,000 USD.

The daily chart above shows the current candle showing some indecision, as illustrated by its fairly narrow trading range defined by lengthier wicks. We are still just 10 hours into this candle at the time of this writing, so much time remains for the story to change.

The hourly chart may be more instructive, though. The highlighted portion shows a trading range forming near distribution, with some bearish candles in the mix, suggesting price action distribution is occurring.

As such, a bearish outcome seems to me to be the most likely outcome here, with a potential target for support at 6031. Entering at 6750 with a stop at 7100 offers a nice 2:1 reward/risk ratio for traders here comfortable taking the short side.