Bitcoin Shows Signs of Reversal; But $6,550 Shows Bullish Case Remains Intact

Aayush Jindal

1 year ago

2 mins read

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Bitcoin failed to surpass the $7,200 resistance and declined below $7,000 against the US Dollar. BTC price is showing a few bearish signs, but the bulls are likely to protect $6,555.

Bitcoin is declining and trading below the $7,000 support zone against the US Dollar.
It is testing a major support near the $6,750-$6,800 region.
There was a break below a key bullish trend line with support near $7,110 on the hourly chart of the BTC/USD pair (data feed from Kraken).
The pair is likely to find a strong buying interest if it corrects further towards the $6,555 support.

Bitcoin Correcting Gains

After a couple of failed attempts above $7,200, bitcoin price reacted to the downside against the US Dollar. BTC started a downside correction from the $7,229 swing high and traded below the $7,100 support.

The price declined sharply below the $7,000 support and the 100 hourly simple moving average. More importantly, there was a break below a key bullish trend line with support near $7,110 on the hourly chart of the BTC/USD pair.

The pair even spiked below the $6,800 support and tested $6,750. A low is formed near $6,761 and the price is correcting consolidating losses.

Bitcoin price is testing the 23.6% Fib retracement level of the recent drop from the $7,226 high to $6,761 low. An initial resistance on the upside is near the $7,000 handle (the recent breakdown zone).

The 50% Fib retracement level of the recent drop from the $7,226 high to $6,761 low is also near the $7,000 zone to act as a major hurdle for the bulls.

The main resistance is now forming near the $7,100 level and the 100 hourly simple moving average. Any further gains could open the doors for a strong increase above the $7,200 resistance area.

Bulls in Action?

On the downside, an immediate support is near the $6,750-$6,800 zone. If bitcoin slides below the $6,750 support, there is a risk of an extended decline in the near term.

The key support is seen near the $6,555 level, where the bulls are likely to take a stand. Any further losses may perhaps start a substantial decline towards the $6,200 and $6,000 levels in the near term.

Technical indicators:

Hourly MACD – The MACD is gaining momentum in the bearish zone.

Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is now below the 40 level.

Major Support Levels – $6,750 followed by $6,555.

Major Resistance Levels – $7,000, $7,100 and $7,200.

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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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