Bitcoin price tested a crucial support near $6,120 recently against the US Dollar. BTC/USD must remain above $6,120 and $5,800 to bounce back towards $7,000.
- Bitcoin price traded lower recently and tested an important support near $6,100-6,120.
- BTC/USD is holding a significant bullish trend line with support at $6,140 on the daily chart.
- BTC price could recover in the short term if it stays above $6,120.
Bitcoin price analysis
This past week, there was a sharp reversal in bitcoin price from the $7,412 swing high. BTC/USD dropped heavily and broke the $6,700 and $6,420 support levels to move into a negative zone.
The daily chart of BTC/USD indicates that the price declined below key supports and settled below the $6,420 support plus the 50-day simple moving average.
However, bitcoin buyers managed to hold losses near a significant bullish trend line with current support at $6,140 on the same chart. The trend line is clearly crucial since there was no close below it and the price formed a low of $6,123.
At the moment, the price is consolidating above the trend line and $6,150. An initial resistance is the 23.6% Fibonacci retracement level of the last significant decline from the $7,412 high to $6,123 low.
The last two daily candles are positive above $6,200, but they both are indicating a lack in the bullish momentum. BTC buyers need to gain traction above the $6,420 resistance to take the price higher. The next major hurdle is close to the $6,770 level and the 50% Fibonacci retracement level of the last significant decline from the $7,412 high to $6,123 low.
Above $6,770, the 50-day SMA and a connecting bearish trend line are positioned at $7,000. Therefore, in the medium term, the price has to clear the $7,000 barrier to move into a bullish zone.
On the flip side, if the bitcoin price fails to stay above the bullish trend line and $6,120, then the last line of defense is $5,800. Should there be a break below $5,800, the price could drop significantly towards $5,000 in the near term.