Bitcoin Is Plunging, But It’s Too Early To Say Bulls Have Given Up 2020-01-20

Aayush Jindal

1 year ago

2 mins read

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Bitcoin failed to extend gains above $9,200 and started a downside correction against the US Dollar. BTC price tested the $8,500 support and it could bounce back.

Bitcoin price is down more than 5% from the $9,186 high against the US Dollar.
The $8,500 support area could play an important role in the coming sessions.
There was a break below a major ascending channel with support near $8,830 on the hourly chart of the BTC/USD pair (data feed from Kraken).
The pair could either bounce back from $8,500 or extend its decline towards $8,000.

Bitcoin Holding Key Uptrend Support

Yesterday, we discussed a crucial breakout pattern in bitcoin above $8,500 on the daily chart against the US Dollar. BTC price extended gains above $9,000, but it struggled to clear the main $9,200 and $9,300 resistance levels (as pointed out yesterday).

A new 2020 high was formed near $9,186 before the price started a sharp decline. There was a break below the $9,000 and $8,800 support levels. Besides, there was a break below a major ascending channel with support near $8,830 on the hourly chart of the BTC/USD pair.

It opened the doors for more losses below the $8,800 support and the 100 hourly simple moving average. Finally, bitcoin tested the key $8,500 support area, where the bulls took a stand.

A low is formed near $8,473 and the price is currently recovering. It traded above the 23.6% Fib retracement level of the recent slide from the $9,186 high to $8,473 low.

On the downside, the main uptrend support is near the $8,500 level. If there is a downside break below the $8,500 support, the price could extend its correction towards the $8,000 pivot level. Any further losses below $8,000 might start a downtrend in the near term.

BTC Could Bounce From $8,500

If BTC price stays above the $8,500 support, it is likely to start a fresh increase. The first key resistance is near the $8,800 area and the 100 hourly simple moving average.

Additionally, the 50% Fib retracement level of the recent slide from the $9,186 high to $8,473 low is also near the $8,830 level. Therefore, bitcoin must surpass the $8,880 area to resume is uptrend towards $9,200 and $9,500 in the coming days.

Technical indicators:

Hourly MACD – The MACD is losing momentum in the bearish zone and turning bullish.

Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is currently near 40 and struggling to rise towards 50.

Major Support Levels – $8,500 followed by $8,000.

Major Resistance Levels – $8,800, $8,830 and $9,200.

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.

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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