TA: Bitcoin Key Indicators Suggest Risk of Extended Downside Correction
Bitcoin price is down over $500 from the $13,850 swing high against the US Dollar. BTC is showing bearish signs and it could even decline below the $13,000 support.
- Bitcoin failed to stay above the $13,500 support and declined below $13,200.
- The price is currently consolidating near $13,200 and the 100 hourly simple moving average.
- There is a key contracting triangle forming with support near $13,220 on the hourly chart of the BTC/USD pair (data feed from Kraken).
- The pair is likely to resume its decline below $13,200 and $13,100 in the near term.
Bitcoin Price Starts Downside Correction
Bitcoin price traded to a new monthly high at $13,850 before starting a major downside correction. BTC broke the key $13,500 support level to move into a short-term bearish zone.
The decline gained pace below the $13,200 level and the 100 hourly simple moving average. The price even spiked below the $13,000 level and traded as low as $12,899. Recently, there was a recovery wave above the $13,000 and $13,100 levels.
The price traded above the 23.6% Fib retracement level of the recent decline from the $13,850 high to $12,899 low. Bitcoin is currently consolidating near $13,200 and the 100 hourly simple moving average.
There is also a key contracting triangle forming with support near $13,220 on the hourly chart of the BTC/USD pair. If there is a downside break below the triangle support and $13,200, there is a risk of a fresh decline. The next major support is near the $13,000 level.
If the bulls fail to defend the $13,000 support level, it could open the doors for an extended downside correction towards the $12,600 level or $12,500 in the coming sessions.
Upside Break in BTC?
If bitcoin stays above the $13,200 support level, it could clear the triangle resistance near the $13,315 level. The next key resistance is near the $13,375 level. It is close to the 50% Fib retracement level of the recent decline from the $13,850 high to $12,899 low.
The main hurdle for the bulls is near the $13,500 level, above which the price is likely to restart its rally and it could even revisit the $13,850 high.
Technical indicators:
Hourly MACD – The MACD is likely to move into the bearish zone.
Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is now well below the 50 level.
Major Support Levels – $13,200, followed by $13,000.
Major Resistance Levels – $13,315, $13,375 and $13,500.
OhNoCrypto
via https://www.ohnocrypto.com
Aayush Jindal, @KhareemSudlow
