Bulls Beware: Bitcoin Could Dive After This Key Technical Breakdown

Aayush Jindal

1 year ago

2 mins read

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Bitcoin is showing a few bearish signs below the $7,400 resistance area against the US Dollar. BTC price is currently declining and it could extend its weakness towards $7,100 or $6,800.

Bitcoin is struggling to clear the $7,400 and $7,500 resistance levels against the US Dollar.
The bears are slowly taking control and they are likely aiming a test of $7,000.
There was a break below a crucial bullish trend line with support near $7,300 on the hourly chart of the BTC/USD pair (data feed from Kraken).
The pair could correct sharply towards the $7,100 support or $6,800.

Bitcoin Could Correct Lower

In the past two days, bitcoin bulls made more than two attempts to gain strength above the $7,400 and $7,500 levels against the US Dollar, but they failed. BTC price seems to be forming a short term topping pattern near the $7,440 level.

The last swing high was below $7,440 and the price is now trading below the 23.6% Fib retracement level of the upward move from the $7,080 low to $7,429 swing high.

More importantly, there was a break below a crucial bullish trend line with support near $7,300 on the hourly chart of the BTC/USD pair. Bitcoin price is now trading below the $7,280 level.

An immediate support is near the $7,255 level. It is close to the 50% Fib retracement level of the upward move from the $7,080 low to $7,429 swing high. If there is a clear break below the $7,255 level, the bears are likely to take control in the short term.

The next major support is near the $7,150 level and the 100 hourly simple moving average, below which the bulls are likely to protect the $7,100 support area.

If the bulls fail to hold the $7,100 support area, the price is likely to continue lower below $7,000. The next stop for the bears may perhaps be $6,800.

Key Breakout Zone

On the upside, bitcoin is facing a strong resistance near the $7,400 and $7,500 levels. Therefore, the bulls need to gain momentum above the $7,500 zone.

If there is a successful break and close above $7,500, the price is likely to continue higher above $7,600. The next major resistance is near $7,800, above which the bulls could aim a test of $8,000.

Technical indicators:

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

Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is now below the 50 level.

Major Support Levels – $7,150 followed by $7,100.

Major Resistance Levels – $7,400, $7,500 and $7,800.

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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