Bitcoin Reaches Crucial Juncture: Breakdown Below This Level Could Spark Vertical Drop

Aayush Jindal

1 year ago

2 mins read

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Bitcoin price failed to continue above the $9,500 resistance and declined recently against the US Dollar. BTC could either bounce back from $9,150 or it might decline heavily.

Bitcoin bulls are fighting hard to protect the key $9,200 and $9,150 support levels against the US Dollar.
The price remains at a risk of a sharp decline if there is a break below $9,150.
There is a declining channel forming with resistance near $9,320 on the hourly chart of the BTC/USD pair (data feed from Kraken).
The bulls need to gain momentum above $9,500 to avoid a breakdown below $9,150.

Bitcoin Testing Key Support

Yesterday, we saw a short term spike in bitcoin above the $9,500 resistance against the US Dollar. BTC even climbed above the $9,600 level and traded to a new 2020 high at $9,609.

However, the bulls failed to keep the price above the key $9,500 resistance. As a result, there was a fresh decline below the $9,400 level and the 100 hourly simple moving average.

Bitcoin price even traded below the $9,300 level and tested the $9,200 support area. A low is formed near $9,223 and the price is currently consolidating above the $9,220 and $9,200 support levels.

On the upside, an initial resistance is near the $9,320 level. Besides, the 23.3% Fib retracement level of the recent decline from the $9,609 high to $9,223 low is also near $9,320. More importantly, there is a declining channel forming with resistance near $9,320 on the hourly chart of the BTC/USD pair.

On the downside, there is a confluence of supports forming near the $9,200 level. If bitcoin fails to stay above the $9,200 and $9,150 support levels, there is a risk of a breakdown.

In the mentioned case, the price is likely to slide below the $9,000 support area. The next major support is near the $8,800 level, where the bulls are likely to take a stand.

Chances of Upside Break?

To start a decent upward move, bitcoin must climb above $9,300 and the channel resistance. The next resistance is seen near the $9,420 level. It coincides with the 50% Fib retracement level of the recent decline from the $9,609 high to $9,223 low.

A clear break above $9,420 and a close above the 100 hourly SMA might increase the chances of upside continuation above the $9,500 and $9,600 levels in the near term.

Technical indicators:

Hourly MACD – The MACD is slowly gaining pace in the bearish zone.

Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is currently sliding towards the 40 level.

Major Support Levels – $9,200 followed by $9,150.

Major Resistance Levels – $9,320, $9,420 and $9,500.

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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