- There was a strong rise in bitcoin price from above $8,000 and $9,000 against the US Dollar.
- The price even spiked above the $10,000 resistance, but it failed to hold gains and declined.
- There is a short term bullish trend line forming with support near $9,080 on the 4-hours chart of the BTC/USD pair (data feed from Kraken).
- The price could bounce back as long as it is trading above the $8,600 and $8,500 support levels.
Bitcoin price is trimming gains after a sharp rally against the US Dollar. BTC must stay above $8,500 to start a fresh increase. If not, it could dive back to $8,000.
Bitcoin Price Weekly Analysis (BTC)
In the past two days, there were heavy swing moves in BTC from the $7,500 support against the US Dollar. The BTC/USD pair rallied more than 20% and broke many hurdles near $8,500 and $9,000.
Moreover, there was a close above the $8,500 resistance area and the 100 simple moving average (4-hours). Finally, the price rallied above the $10,000 resistance and traded close to the $10,600 resistance area.
However, the bulls failed to remain in control and a top was formed near $10,591. Later, there was a strong downside correction below the $10,000 level. The price traded below the 23.6% Fib retracement level of the rally from the $7,425 swing low to $10,591 high.
Besides, the price traded below $9,500 and tested the $9,000 support area. Besides, it seems like the 50% Fib retracement level of the rally from the $7,425 swing low to $10,591 high is currently acting as a strong support.
More importantly, there is a short term bullish trend line forming with support near $9,080 on the 4-hours chart of the BTC/USD pair. If there is a downside break below the trend line and $9,000, bitcoin price could test the next major support near the $8,600 area.
The $8,600 and $8,500 levels are crucial supports since they acted as hurdles previously. Additionally, the 61.8% Fib retracement level of the rally from the $7,425 swing low to $10,591 high might also provide support.
Therefore, the $8,500 support is likely to act as a major support. If the price fails to stay above $8,500, it could move back into a downtrend.
Looking at the chart, bitcoin price is clearly trimming gains and approaching a few key supports near $9,000 and $8,600. If it fails to stay above $8,500, the recent rally could completely reverse in the coming days.
Technical indicators
4 hours MACD – The MACD for BTC/USD is slowly moving in the bearish zone.
4 hours RSI (Relative Strength Index) – The RSI for BTC/USD is moving lower and is close to the 50 level.
Major Support Level – $8,500
Major Resistance Level – $9,500
