Bitcoin Recovering After a Sharp Decline: Here’s Why Bulls Could Fail

Aayush Jindal

1 year ago

2 mins read

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Bitcoin declined sharply below the $6,200 support against the US Dollar. BTC price found support near $5,850 and it is currently recovering towards a couple of key hurdles.

Bitcoin is correcting higher from the $5,846 swing low against the US Dollar.
The price is showing positive signs above the $6,000 level, but there are many hurdles on the upside.
There was a break above a key declining channel with resistance near $6,080 on the hourly chart of the BTC/USD pair (data feed from Kraken).
The pair is likely to face a strong resistance near the $6,300 and $6,350 resistance levels.

Bitcoin Correcting Losses

Recently, there was a steady decline in bitcoin from well above the $6,500 support against the US Dollar. BTC price even broke the key $6,200 support area and the 100 hourly simple moving average.

The bears were able to push the price below the $6,000 support area. The price traded as low as $6,846 and it is currently correcting higher. There was a strong recovery wave above the $5,950 and $6,000 levels.

Bitcoin surpassed the 23.6% Fib retracement level of the downward move from the $6,875 high to $5,846 low. Moreover, there was a break above a key declining channel with resistance near $6,080 on the hourly chart of the BTC/USD pair.

The pair is now trading near the $6,200 resistance area (the previous support). On the upside, there are many key hurdles, starting with $6,300. The main resistance is near the $6,350 level and the 100 hourly simple moving average.

The 50% Fib retracement level of the downward move from the $6,875 high to $5,846 low is also near the $6,360 level to act as a key hurdle for the bulls.

If the bulls gain pace above the $6,300 and $6,350 resistance levels, there are chances of a steady rise in the coming sessions. The next major resistance is near the $6,500 and $6,650 levels.

Limited Recovery

If bitcoin fails to continue above the $6,200 and $6,300 resistance levels, it could start a fresh decline. An initial support on the downside is near the $6,000 and $5,950 levels.

The main support is now near the $5,850 level, below which there is a risk of a larger decline in the coming sessions.

Technical indicators:

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

Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is rising and it is back above the 50 level.

Major Support Levels – $6,000 followed by $5,950.

Major Resistance Levels – $6,200, $6,300 and $6,350.

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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.
As a software engineer, Aayush harnesses the power of technology to optimize trading strategies and develop innovative solutions for navigating the volatile waters of financial markets. His background in software engineering has equipped him with a unique skill set, enabling him to leverage cutting-edge tools and algorithms to gain a competitive edge in an ever-evolving landscape.

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At his core, Aayush is driven by a profound passion for analyzing markets and uncovering profitable opportunities amidst volatility. Whether he's poring over price charts, identifying key support and resistance levels, or providing insightful analysis to his clients and followers, Aayush's unwavering dedication to his craft sets him apart as a true industry leader and a beacon of inspiration to aspiring traders around the globe.

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.