Bitcoin Defies Gravity But Here Is Why It Could Correct In Short-Term

Aayush Jindal

5 years ago

2 mins read

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Bitcoin surged more than 5% to climb above the $7,700 and $7,800 resistance levels against the US Dollar. BTC price tested the $8,000 barrier and it could correct lower in the short term.

Bitcoin price traded to a new 2020 high close to the $8,000 mark against the US Dollar.
Despite all hurdles near $7,700 and $7,800, the bulls were able to gain strength.
There was a break above a major contracting triangle with resistance near $7,620 on the hourly chart of the BTC/USD pair (data feed from Kraken).
A short term correction is likely towards the $7,750 and $7,680 support levels.

Bitcoin Tops Near $8,000

Yesterday, we discussed the chances of bitcoin rising towards the $7,800 and $8,000 resistance levels against the US Dollar. BTC overcame all hurdles and was able to climb above the $7,800 resistance area.

Besides, there was a close above the $7,700 pivot level and the 100 hourly simple moving average. More importantly, there was a break above a major contracting triangle with resistance near $7,620 on the hourly chart of the BTC/USD pair.

The pair rallied towards the $8,000 resistance, where sellers emerged. A new 2020 high is formed near $7,990 and the price is currently correcting lower. It traded below the 23.6% Fib retracement level of the recent rally from the $7,486 low to $7,990 high.

On the downside, an initial support is near the $7,800 area. However, the first key support is near the $7,740 level. Moreover, the 50% Fib retracement level of the recent rally from the $7,486 low to $7,990 high is also near the $7,740 level.

If there is an extended downside correction, bitcoin price might test the $7,680 support. Any further downsides might discourage the bulls and the price could dip towards the $7,580 support area.

Chances of Another Upward Move in BTC

It seems like BTC stalled close to the key $8,000 resistance area. Therefore, a short term correction cannot be ignored below the $7,800 area.

Having said that, the price is likely to find bids near $7,740 or $7,680. Later, it could consolidate for a couple of sessions before another rise towards $8,000 or even $8,150.

Looking at the chart, bitcoin price is likely to correct lower towards $7,680 before a fresh increase. Only if it settles below $7,500, the bears could take control and the price might drop to $7,000.

Technical indicators:

Hourly MACD – The MACD is slowly reducing its bullish slope.

Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is correcting lower from the 80 zone.

Major Support Levels – $7,740 followed by $7,680.

Major Resistance Levels – $7,980, $8,000 and $8,150.

Aayush Jindal

Aayush Jindal, a luminary in the world of financial markets, whose expertise spans over 15 illustrious years in the realms of Forex and cryptocurrency trading. Renowned for his unparalleled proficiency in providing technical analysis, Aayush is a trusted advisor and senior market expert to investors worldwide, guiding them through the intricate landscapes of modern finance with his keen insights and astute chart analysis.

From a young age, Aayush exhibited a natural aptitude for deciphering complex systems and unraveling patterns. Fueled by an insatiable curiosity for understanding market dynamics, he embarked on a journey that would lead him to become one of the foremost authorities in the fields of Forex and crypto trading. With a meticulous eye for detail and an unwavering commitment to excellence, Aayush honed his craft over the years, mastering the art of technical analysis and chart interpretation.
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