Bitcoin price formed a short-term bottom at $5,874 against the US Dollar. BTC/USD bounced back above $6,300, but it is currently testing a crucial resistance where buyers could fail.
Important points
Recently, we saw a major downward move in bitcoin price below the $6,220 and $6,000 support levels. BTC/USD broke the last swing low and traded to a new low at $5,874 before buyers took a stand.
The 2-hours chart of BTC price suggests that there was a solid reversal from the $5,874 low. The price bounced back and broke the $6,220 and $6,300 resistance levels.
During the rise, the price also cleared the 50% Fibonacci retracement level of the last slide from the $6,553 high to $5,874 low. It opened the doors for more gains above $6,220, but the price ran into a significant resistance zone.
There is an important bearish trend line in place with current resistance near $6,400-6,440 on the same chart, which is currently preventing gains along with the 100 simple moving average (2-hours, close).
Moreover, the price is struggling to move above the 76.4% Fibonacci retracement level of the last slide from the $6,553 high to $5,874 low. There were 2-3 attempts already to break the $6,400-6,440 resistance zone, but bitcoin buyers failed to gain momentum.
Therefore, there are two possible scenarios – first, the price breaks the $6,440 resistance and trades towards the last swing high at $6,553. Second, sellers regain control and bitcoin price drops back towards the $6,220 and $6,100 support levels.
Should there be a break above $6,553, the price may perhaps move into a bullish zone with the next targets as $6,640 and $6,750. On the flip side, a failure to gain momentum above $6,440 could be a strong bearish signal and bitcoin will most likely resume its downtrend in the near term.
Also, read: Bitcoin in Danger of Crashing to $1000 in the Long Term, says Wall Street Strategist
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