Bitcoin Just Reversed and Its Vulnerable To A Drop Towards $5,200

Aayush Jindal

1 year ago

2 mins read

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Bitcoin is down more than 5% and it broke the $6,000 support against the US Dollar. BTC price is now showing bearish signs and it could continue to move down.

Bitcoin started a fresh decline after it failed to clear the $6,500 resistance against the US Dollar.
The price is now trading below the $6,200 and $6,000 support levels.
There is a key contracting triangle forming with support near $5,780 on the hourly chart of the BTC/USD pair (data feed from Kraken).
The pair could either decline sharply below $5,750 or it might attempt a fresh increase to $6,500.

Bitcoin Down 5%

After a decent upward move, bitcoin struggled to gain momentum above the $6,500 resistance against the US Dollar. BTC price made a couple of attempts to settle above $6,500, but it failed.

As a result, there was a fresh decline below the $6,200 support and the 100 hourly simple moving average. The price gained bearish momentum and traded below the $6,000 support.

A new weekly low is formed near the $5,694 level and bitcoin is currently consolidating losses. It is trading above the 23.6% Fib retracement level of the recent decline from the $6,471 high to $5,694 low.

There are many hurdles on the upside, starting with the $6,000 level. The first major hurdle is near the $6,080 level and the 100 hourly simple moving average. The 50% Fib retracement level of the recent decline from the $6,471 high to $5,694 low is also near $6,080.

More importantly, there is a key contracting triangle forming with support near $5,780 on the hourly chart of the BTC/USD pair. To move into a positive zone, the price must clear the triangle resistance and $6,080.

The next hurdle is near the $6,200 level, above which the bulls are likely to aim a retest of the key $6,500 resistance area in the near term.

More Downsides?

If bitcoin fails to recover above the $6,000 and $6,080 resistance levels, it could continue to move down. An initial support is near the $5,800 and $5,780 levels.

A clear break below the triangle support and $5,700 may perhaps spark more downsides. The next support is near the $5,500 level, below which it could continue to move down towards $5,200 in the near term.

Technical indicators:

Hourly MACD – The MACD is attempting a change in slope to the bullish zone.

Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is currently below the 50 level, with a bearish angle.

Major Support Levels – $5,780 followed by $5,500.

Major Resistance Levels – $6,000, $6,080 and $6,200.

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.

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