Bitcoin price trimmed most of its last week gains and broke the $7,200 support against the US Dollar. BTC/USD is currently testing an important support at $6,400, below which, it could slide to $6,000.
- Bitcoin was completely rejected from the $8,200 and $8,400 resistance area.
- BTC/USD broke a crucial bullish trend line with support at $6,800 on the daily chart.
- BTC price is under a lot of pressure below $7,000 and it is testing the last important support before $6,000.
Bitcoin Price Analysis
The past few days were extremely bearish on bitcoin price as it failed to surpass the $8,200 and $8,400 resistance levels. BTC/USD tumbled with back-to-back bearish candles on the daily chart and settled below $7,000.
The daily chart of BTC/USD indicates that the price broke the 50% Fibonacci retracement level of the last significant upward move from the $6,096 low to $8,510 swing high.
It opened the doors for more declines and BTC price traded below the $7,000 support and settled below the 100-day simple moving average. More importantly, there was a break below a crucial bullish trend line with support at $6,800 on the same chart.
At the moment, the price is testing an important support at $6,400, which was a pivot level and a support earlier. Moreover, it coincides with the 88.6% Fibonacci retracement level of the last significant upward move from the $6,096 low to $8,510 swing high.
Therefore, the price may perhaps recover a few points from the $6,400 support. However, recoveries are likely to face many challenges near the $6,800 and $7,000 levels. Only a close above the $7,200 pivot level and the 100-day SMA could push the price back in a positive zone.
Should the price break the $6,400 support and there is a 2-hour close below $6,380, there could be a sharp drop towards the next support at $6,000. Below this, the price will most likely revisit the last low at $5,770.
Overall, bitcoin price entered a strong bearish zone and a failure to hold $6,400 and $6,000 possibly will result in heavy declines in the near term.
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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 markets contributor and observer. He possesses strong technical analytical skills and is well known for his entertaining and informative analysis of the currency, commodities, Bitcoin and Ethereum markets. Tou can follow him on twitter at @aayushJS or reach out to him at aayush[at]coingape.com