Bitcoin Price Analysis: BTC/USD Correction Started?
Bitcoin price after trading as high as $548 started to correct lower vs the US Dollar and broke a major support area.
There was a bullish trend line on the hourly chart (data feed via Bitstamp) of BTC/USD as highlighted yesterday, which was broken during the downside move.
Bitcoin Price Downside Move?
BTC showed a few bearish signs vs the US dollar after trading above the $540 mark. Basically, the price struggled to break the $550 level, and started to move down.
Yesterday, I highlighted a bullish trend line on the hourly chart (data feed via Bitstamp) of BTC/USD and was looking for a test. However, the BTC bulls fail to defend the trend line support as the price moved below it.
Moreover, BTC/USD also traded below the 23.6% Fib retracement level of the last move from the $468 low to $548 high. The recent break found support near the 100 hourly simple moving average, which acted as a barrier for the sellers.
The 100 hourly SMA is also positioned around the 38.2% Fib retracement level of the last move from the $468 low to $548 high, which increases the importance of the support area.
So, if the price continues to find bids near the 100 hourly SMA support zone, then there is a possibility of a bounce back in the near term.
On the upside, the $550 level holds the key, and the BTC bulls may find it very tough to break the stated level. So, we can say that the price is stuck between a major support area at 100 SMA and a crucial resistance area at $550.
The hourly RSI just moved below the 50 level, which not encouraging for the BTC bulls in the short term, and may call for a test of the 100 SMA.
Chart Source – TradingView.com and data feed by Bitstamp