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.
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