Bulls Beware: Bitcoin Could Dive After This Key Technical Breakdown
Bitcoin is showing a few bearish signs below the $7,400 resistance area against the US Dollar. BTC price is currently declining and it could extend its weakness towards $7,100 or $6,800.
- Bitcoin is struggling to clear the $7,400 and $7,500 resistance levels against the US Dollar.
- The bears are slowly taking control and they are likely aiming a test of $7,000.
- There was a break below a crucial bullish trend line with support near $7,300 on the hourly chart of the BTC/USD pair (data feed from Kraken).
- The pair could correct sharply towards the $7,100 support or $6,800.
Bitcoin Could Correct Lower
In the past two days, bitcoin bulls made more than two attempts to gain strength above the $7,400 and $7,500 levels against the US Dollar, but they failed. BTC price seems to be forming a short term topping pattern near the $7,440 level.
The last swing high was below $7,440 and the price is now trading below the 23.6% Fib retracement level of the upward move from the $7,080 low to $7,429 swing high.
More importantly, there was a break below a crucial bullish trend line with support near $7,300 on the hourly chart of the BTC/USD pair. Bitcoin price is now trading below the $7,280 level.
An immediate support is near the $7,255 level. It is close to the 50% Fib retracement level of the upward move from the $7,080 low to $7,429 swing high. If there is a clear break below the $7,255 level, the bears are likely to take control in the short term.
The next major support is near the $7,150 level and the 100 hourly simple moving average, below which the bulls are likely to protect the $7,100 support area.
If the bulls fail to hold the $7,100 support area, the price is likely to continue lower below $7,000. The next stop for the bears may perhaps be $6,800.
Key Breakout Zone
On the upside, bitcoin is facing a strong resistance near the $7,400 and $7,500 levels. Therefore, the bulls need to gain momentum above the $7,500 zone.
If there is a successful break and close above $7,500, the price is likely to continue higher above $7,600. The next major resistance is near $7,800, above which the bulls could aim a test of $8,000.
Hourly MACD – The MACD is currently losing momentum in the bullish zone.
Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is now below the 50 level.
Major Support Levels – $7,150 followed by $7,100.
Major Resistance Levels – $7,400, $7,500 and $7,800.
Aayush is a Senior Forex, Cryptocurrencies and Financial Market Strategist with a background in IT and financial markets. He specialises in market strategies and technical analysis, and has spent over a DECADE as a financial…
Source: Read Full Article