Why Bitcoin Bulls Need To Be Cautious As Price Approaches $7.8K-8K

Aayush Jindal

5 years ago

2 mins read

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Bitcoin might be starting a strong bullish wave above $7,500 against the US Dollar. However, BTC bulls must be careful considering a cluster of resistances between $7,700 and $8,000.

Bitcoin price is gaining traction above the $7,400 and $7,500 resistance levels against the US Dollar.
There are many hurdles on the upside, starting with $7,640 and up to $8,000.
There is a connecting bullish trend line forming with support near $7,360 on the hourly chart of the BTC/USD pair (data feed from Kraken).
A continuous failure near $7,700 and $7,800 could spark another bearish wave.

Bitcoin Price Approaching Resistance

In the past few sessions, there was a decent increase in bitcoin above the $7.300 resistance against the US Dollar. Moreover, BTC settled above the $7,400 level and the 100 hourly simple moving average.

Recently, there was a break above a short term bearish trend line with resistance near $7,455 on the hourly chart. It opened the doors for more gains above the $7,500 resistance.

The price traded to a new 2020 high at $7,572 and it is currently correcting lower. An initial support on the downside is near the $7,500 level. Besides, the 23.6% Fib retracement level of the recent rise from the $7,301 low to $7,572 high is also near the $7,500 area.

On the upside, an immediate resistance for bitcoin is near $7,580 and $7,600. The first key resistance is near the $7,640 level. More importantly, there is a cluster of hurdles between the $7,700 and $8,000 levels.

Therefore, the bulls need to be careful as the price approaches the key $8,000 barrier. If there is a successful break above the $8,000 resistance, the price could surge towards $8,500 and $8,800.

What if BTC Fails Near $7,700 and $7,800?

As mentioned, there are many hurdles between $7,700 and $8,000. So, it’s hard to discard chances of a bearish reaction below $7,500 and $7,450.

The first main support is near the $7,400 level, followed by a connecting bullish trend line near $7,360 on the same chart. If the bears succeed in pushing the price below the trend line, there is a risk of a larger pullback towards the $7,200 support area.

Looking at the chart, bitcoin price is rising steadily towards many barriers on the upside, starting with $7,640. If the bulls remain in action, we are likely to witness a break above $8,000. If not, the price might revisit $7,200.

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 correcting lower towards the 50 level.

Major Support Levels – $7,450 followed by $7,360.

Major Resistance Levels – $7,580, $7,640 and $7,780.

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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In a world where uncertainty reigns supreme, Aayush Jindal stands as a guiding light, illuminating the path to financial success with his unparalleled expertise, unwavering integrity, and boundless enthusiasm for the markets.