Failed Breakout Revives Bitcoin's Bull-Bear Tug-of-War

Bitcoin's retreat from Sunday's high of $7,779 has poured cold water over the bull mood generated by the weekend's positive price action and neutralized the immediate outlook.

BTC closed on Sunday above a key falling trendline resistance level, signaling a short-term bullish-to-bearish trend change.

Bitcoin suffered a rising wedge breakdown in the U.S. hours on Monday, signaling that the corrective rally from the recent low of $7,040 had ended.

In the end, the failed breakout was no surprise, as low trading volumes had warned of a bull trap.

The above chart shows that bitcoin is back inside a falling channel and risks a quick drop to $6,980 if the bulls fail to defend the support at $7,260.

Further, the rising-wedge breakdown as seen in the 4-hour chart below, also indicates the corrective rally has ended and prices could soon revisit the recent low of $7,040.

Still, the overall outlook may be more neutral, with bitcoin creating a doji candle on the 4-hour chart above, signaling indecision in the marketplace.

If the current 4-hour candle closes below $7,732, it could bolster the already bearish technicals.

If the current 4-hour candle closes above $7,500, bitcoin could revisit $7,700.

View Bitcoin's drop back inside the falling channel as seen in the daily chart indicates the immediate upward pressure has eased.