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Bitcoin Holding Crucial Support: Here’s What Could Propel it to $7K

Avatar Aayush Jindal 2 months ago

Bitcoin corrected lower from the $6,600 resistance area against the US Dollar. BTC price is currently holding the key $6,250 support and it could start a fresh increase in the near term.

  • Bitcoin started a short term downside correction from the $6,636 high against the US Dollar.
  • The price is currently holding the key $6,250 support and the 100 hourly SMA.
  • There is likely a bullish flag pattern forming with resistance near $6,420 on the hourly chart of the BTC/USD pair (data feed from Kraken).
  • The pair could either rally above $6,500 or it might start a fresh decline towards $5,850.

Bitcoin Could Rise Again

Yesterday, we discussed the chances of a short term correction in bitcoin from the $6,636 high against the US Dollar. BTC price did correct lower and traded below the $6,500 support area.

The bears were able to push the price below the 23.6% Fib retracement level of the upward move from the $5,850 swing low to $6,636 high. Besides, there was a break below the $6,400 level, but the price remained well bid above the 100 hourly simple moving average.

It seems like the bulls protected the 100 hourly SMA and the 50% Fib retracement level of the upward move from the $5,850 swing low to $6,636 high.

The price is currently rising and trading above $6,300. There is likely a bullish flag pattern forming with resistance near $6,420 on the hourly chart of the BTC/USD pair. If bitcoin surpasses the flag resistance and gains pace above the $6,450 level, there are high chances of a strong increase.

Bitcoin Price

Bitcoin Price

The next key resistance is near the $6,600 level, above which the price is likely to gain bullish momentum above $6,640. In the mentioned bullish case, the bulls are likely to aim a test of the $7,000 resistance.

Another Rejection?

If bitcoin fails to clear the flag resistance and $6,450, it could struggle to stay above the 100 hourly SMA. A bearish break below the 100 hourly SMA and the $6,250 support may perhaps extend losses.

The next support is near the $6,000 level, below which the bears are likely to aim a retest of the $5,850 support area in the near term.

Technical indicators:

Hourly MACD – The MACD is currently losing momentum in the bearish zone.

Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is currently struggling to move back above the 50 level.

Major Support Levels – $6,250 followed by $6,000.

Major Resistance Levels – $6,450, $6,500 and $6,600.

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Risk disclaimer: 76.4% of retail CFD accounts lose money.

Aayush Jindal

Aayush is a Senior Forex, Cryptocurrencies and Financial Market Strategist with a background in IT and financial markets. He specialises in market strategies and technical analysis, and has spent over a DECADE as a financial...

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