Bitcoin price started a major bearish move from the $8,200 swing high against the US Dollar. BTC/USD traded below $7,640 and recoveries are likely to be capped by $7,800.
- Bitcoin buyers failed to push the price above a key barrier at $8,200-8,300.
- BTC/USD declined sharply and broke a crucial declining channel with support at $7,640 on the 2-hours chart.
- If the recent break is true, BTC price may decline further towards $7,400 and $7,250.
Bitcoin price analysis
This past week, bitcoin price attempted to break an important resistance near $8,200 and $8,300. However, BTC/USD failed to gain traction above $8,200, resulting in a downward move.
The 2-hours chart indicates that the price failed near a declining channel resistance at $8,200 and declined sharply. During the slide, it broke the $7,750 support to move into a bearish zone.
More importantly, there was a break below the declining channel support at $7,640. The price traded as low as $7,461 and it is currently correcting higher. However, the broken channel support at $7,640 is acting as a resistance and is preventing gains above $7,650.
The stated resistance coincides with the 23.6% Fib retracement level of the last dive from the $8,210 high to $7,461 low. Considering the fact that the $7,520/00 is a decent support (the previous pivot level), the price may perhaps attempt a larger upward correction.
Should there be an upside break above the $7,650 resistance, BTC price could test the 50% Fib retracement level of the last dive from the $8,210 high to $7,461 low at $7,836.
However, gains are likely to be limited above the $7,836 level unless there is a change in volumes and momentum. Above $7,836 level, the channel resistance and the 100 SMA (2-hours, green) are the next important barriers for buyers.
On the flip side, if the price extends its slide below the $7,461 low, the next stop for sellers could be the $7,400 level. Below this, bitcoin might tumble towards the $7,250 level.
In short, the recent break-in BTC/USD could intensify if the price trades below the $7,461 low. The squeeze momentum indicator suggests that the bearish momentum peaked and exhausted, which could result in an upward correction towards $7,700 or $7,750.