Bitcoin corrected lower from the $6,600 resistance area against the US Dollar. BTC price is currently holding the key $6,250 support and it could start a fresh increase in the near term.
- Bitcoin started a short term downside correction from the $6,636 high against the US Dollar.
- The price is currently holding the key $6,250 support and the 100 hourly SMA.
- There is likely a bullish flag pattern forming with resistance near $6,420 on the hourly chart of the BTC/USD pair (data feed from Kraken).
- The pair could either rally above $6,500 or it might start a fresh decline towards $5,850.
Bitcoin Could Rise Again
Yesterday, we discussed the chances of a short term correction in bitcoin from the $6,636 high against the US Dollar. BTC price did correct lower and traded below the $6,500 support area.
The bears were able to push the price below the 23.6% Fib retracement level of the upward move from the $5,850 swing low to $6,636 high. Besides, there was a break below the $6,400 level, but the price remained well bid above the 100 hourly simple moving average.
It seems like the bulls protected the 100 hourly SMA and the 50% Fib retracement level of the upward move from the $5,850 swing low to $6,636 high.
The price is currently rising and trading above $6,300. There is likely a bullish flag pattern forming with resistance near $6,420 on the hourly chart of the BTC/USD pair. If bitcoin surpasses the flag resistance and gains pace above the $6,450 level, there are high chances of a strong increase.
The next key resistance is near the $6,600 level, above which the price is likely to gain bullish momentum above $6,640. In the mentioned bullish case, the bulls are likely to aim a test of the $7,000 resistance.
Another Rejection?
If bitcoin fails to clear the flag resistance and $6,450, it could struggle to stay above the 100 hourly SMA. A bearish break below the 100 hourly SMA and the $6,250 support may perhaps extend losses.
The next support is near the $6,000 level, below which the bears are likely to aim a retest of the $5,850 support area in the near term.
Technical indicators:
Hourly MACD – The MACD is currently losing momentum in the bearish zone.
Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is currently struggling to move back above the 50 level.
Major Support Levels – $6,250 followed by $6,000.
Major Resistance Levels – $6,450, $6,500 and $6,600.
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