Bitcoin Price Analysis: BTC/USD Correction Started?

Bitcoin Price Analysis

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.

Happy Trading!

Chart Source – TradingView.com and data feed by Bitstamp

Aayush Jindal

Aayush has spent over EIGHT years as a financial markets contributor and observer. He specializes in market strategies and technical analysis, comes with an IT background. He possess strong technical analytical skills and is well known for his entertaining and informative analysis of the currency and commodities markets.

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1 Response

  1. June 2, 2016

    […] there is a breakout pattern (contracting triangle) forming on the hourly chart (data feed via Bitstamp) of BTC/USD. It is on the verge of a break on the either side. The chances […]

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