Bitcoin (BTC) Recovering But Is This Real Correction?
- Bitcoin price is currently correcting higher above the $8,600 resistance area against the US Dollar.
- The price is still facing a strong resistance near the $8,700 and $8,780 levels.
- Morning’s major declining channel is preventing gains near $8,705 on the hourly chart of the BTC/USD pair (data feed from Kraken).
- The price could correct further, but a clear break above $8,880 is needed for a convincing rise.
Bitcoin price is showing signs of an upside correction above $8,600 against the US Dollar. However, BTC is still facing a lot of hurdles near $8,780, $8,800 and $8,880.
Bitcoin Price Analysis
After trading to a new monthly low at $8,457, bitcoin started an upside correction against the US Dollar. BTC climbed above the $8,550 and $8,600 resistance levels to start the current correction.
Moreover, there was a break above the 50% Fib retracement level of the recent decline from the $8,785 high to $8,457 low. Finally, there was a spike above the $8,650 resistance area.
However, the upward move was capped by the $8,700 resistance the 100 hourly simple moving average. More importantly, morning’s major declining channel is preventing gains near $8,705 on the hourly chart of the BTC/USD pair.
Besides, it seems like the 76.4% Fib retracement level of the recent decline from the $8,785 high to $8,457 low is also acting as a strong resistance.
If there is a clear break above the channel resistance, $8,720, and the 100 hourly SMA, the price is likely to continue to higher. The next key resistance is near the $8,780 level. The main resistance is still near the $8,880 level and a connecting bearish trend line on the same chart.
Above $8,880, bitcoin is likely to continue to higher towards $9,000 and $9,250. Conversely, the price might fail to continue above $8,780 or $8,880. In the mentioned case, the $8,550 level is likely to provide support in the near term.
If the price struggles to hold the $8,550 support area, there are high chances of another break below $8,500 or even $8,450. The next major support is near the $8,300 and $8,200 levels.
Looking at the chart, bitcoin is showing a few positive signs above the $8,600 level. Having said that, the bulls need to gains strength above $8,700 and $8,720. If not, the price will most likely start a fresh decline back towards the $8,550 and $8,450 support levels.
Technical indicators:
Hourly MACD – The MACD is currently gaining momentum in the bullish zone.
Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is currently rising and it is well above the 50 level.
Major Support Levels – $8,550 followed by $8,450.
Major Resistance Levels – $8,720, $8,780 and $8,880.
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Aayush Jindal, Khareem Sudlow
