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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Passionate about technology and science. Pursuing Doctorate in the field of Data Mining, Professor by profession and loves writing interesting articles about Cryptocurrencies, bitcoin, Ethereum, ripple, Forex and commodities. Reach out to her [email protected]