Bitcoin Price Analysis: BTC/USD Downside Break
Bitcoin price finally moved down after a major break against the US Dollar, and my view in yesterday’s BTC/USD played well.
I highlighted in yesterday’s post a contracting triangle pattern formed on the hourly chart (data feed via Bitstamp) of BTC/USD, which was broken recently to clear the way for more declines.
Bitcoin Price Bearish
BTC was crushed against the US Dollar during the past 24 hours, as the price traded towards the $600 level. There was a lot of selling pressure noted, but later the price managed to recover.
It is important to note that our breakout pattern, a contracting triangle pattern formed on the hourly chart (data feed via Bitstamp) of BTC/USD was broken during the downside drift. The price after the break traded as low as $605 from where it somehow managed to recover.
The price is currently correcting higher, and also broke the 38.2% Fib retracement level of the last drop from the $680 high to $605 low. However, the BTC/USD pair is currently finding sellers near the 50% Fib retracement level of the same wave.
The current wave can be considered as a part of a correction, and as long as the price is below the stated fib level, there is a chance of moving down once again.
A break above it could take the price towards the 100 hourly simple moving average, which is aligned with the 76.4% Fib retracement level of the last drop from the $680 high to $605 low.
On the downside, an initial support can be around the $630 level. A break below it could take the price towards the $620 support area.
The hourly RSI is above the 50 level, which is a positive sign, which means there is also a possibility of a move towards the 100 hourly SMA.
Chart Source – TradingView.com and data feed by Bitstamp