- Bitcoin bulls must defend the support at $7,800 to avoid losses targeting $7,600 and $7,400.
- Both the short term and long term analyses show that Bitcoin bullish mojo is still intact.
Following a formidable surge from December lows to new 2020 highs above $8,400, Bitcoin retraced under $8,000 almost immediately. The reason behind the fall is not clear, however, it is easy to interpret that the recovery was not fundamentally supported. Another factor that is likely to have contributed to the reversal is the descending channel resistance Bitcoin failed to break.
The weekly chart shows Bitcoin trading at $7,826 after recovery from levels close to $7,700. The recovery has made it above the 50 Moving Average, at the same time, Bitcoin bulls continue to pull the price towards $8,000.
BTC/USD weekly chart
The relative Strength Index (RSI) is gradually sloping upwards to show that in spite of the recent declines, Bitcoin’s long term trend is still bullish. In addition to the high volume posted, Bitcoin has the ability to correct to higher levels, targeting $9,000.
The short-term analysis shows an asset with immense potential to recover the lost ground. The immediate downside is protected by the 50% Fibonacci level of the last swing high from $8,478 to a swing low of $6,866.
BTC/USD 4-hour chart
The 50 SMA is also in line to provide support at $7,600 while the 100 SMA will stop the selling action at $7,400. The RSI in this short timeframe is finally making advances north after finding support at 40. Provided the RSI continues with the movement towards 70, Bitcoin will gradually overcome the resistance, jumping above $8,000 once again.
Bitcoin Key Levels
Spot rate: $7,782
Relative change: -33
RSI: reversal above 40 signals a growing bullish momentum
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John is a talented writer with over two years of experience actively contributing to the cryptocurrency industry by providing credible, interesting and easy to read the content. His main focus is on cryptocurrency price analysis and industry news coverage. Lets follow him on Twitter at @jjisige