Bitcoin price declined further below the $5,560 support level against the US Dollar. BTC/USD traded to a new yearly low at $5,254 and it remains at a risk of more declines.
- Bitcoin price declined sharply below the $5,560 and $5,420 support levels.
- BTC/USD failed to clear a connecting bearish trend line with resistance at $5,700 on the 2-hours chart.
- BTC might correct a few points, but later it could decline below $5,250 in the short term.
Bitcoin Price Analysis
After a major drop towards the $5,550 level, bitcoin price started consolidating losses against the US Dollar. BTC/USD corrected a few points above the $5,650 level, but it failed to gain bullish momentum.
The 2-hour chart indicates that the price traded towards the $5,750 resistance where sellers emerged. There was no proper close above the $5,750 level and the price remained well below the 100 simple moving average (2-hours).
More importantly, the price failed to clear a connecting bearish trend line with resistance at $5,700 on the same chart. As a result, there was a fresh decline below the $5,560 swing low and the $5,420 support area.
The decline was such that the price even broke the $5,300 support and traded close to the $5,250 support. A new yearly low was formed at $5,254 and the price is currently consolidating losses.
An initial resistance is the 23.6% Fib retracement level of the last decline from the $5,751 high to $5,251 low. However, the most important resistance for buyers is near the $5,560 level, which was a support earlier and now it could prevent gains.
Besides, the 50% Fib retracement level of the last decline from the $5,751 high to $5,251 low is near $5,502. Therefore, any major upside correction from the current levels will most likely face sellers near the $5,500 and $5,560 levels.
On the other hand, if the price continues to move down, it may soon break the $5,250 support. The next major support for bitcoin buyers is near the $5,120 level, below which the price could test $5,050.