Bitcoin price declined heavily below $6,200 and tested $5,400 against the US Dollar. BTC/USD is currently consolidating above $5,560 and it could correct higher in the short term.
- Bitcoin price corrected above the $5,560 resistance, but struggled to gain traction.
- BTC/USD is trading below a major bearish trend line with resistance at $5,700 on the 2-hours chart.
- BTC must move above the $6,700 and $6,740 resistance to recover further in the short term.
Bitcoin Price Analysis
During the past two days, there was a sharp decline in bitcoin price below the $6,200 and $5,900 support levels against the US Dollar. BTC/USD even broke the $5,560 support level and traded towards the $5,400 support.
The 2-hours chart indicates that the price traded as low as $5,404 and it is currently well below the 100 simple moving average (2-hours). Recently, the price recovered and traded above the $5,500 and $5,560 resistance levels.
The upside move was positive as the price even traded above the 23.6% Fib retracement level of the last decline from the $6,501 high to $6,404 low. However, the recovery was capped near the $5,780-5,800 area.
At the outset, the price is following a major bearish trend line with resistance at $5,700 on the same chart. A successful break above the trend line and the $5,720 is needed for buyers to gain bullish momentum in the short term.
If there is a close above $5,720, the price could recover further towards the $5,950 level in the near term. The stated level coincides with the 50% Fib retracement level of the last decline from the $6,501 high to $6,404 low.
On the other hand, if the price fails to move above $5,700 and trades below the $5,560 support, then there could be another sharp bearish reaction. The price may revisit the $5,404 swing low, below which the next stop for sellers is $5,200.
Thus, traders need to monitor the next few moves carefully and wait for a proper upside break above $5,700 and $5,720 in bitcoin price before looking for a decent bounce.
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