Bitcoin started a downside correction from the $10,500 area against the US Dollar. BTC declined below $10,200, but it is still holding the key 100 hourly SMA.
- Bitcoin price failed to climb above $10,500 and corrected lower against the US Dollar.
- There was a sharp dip below the $10,200 level before the bulls protected the 100 hourly SMA.
- There is a key contracting triangle forming with resistance near $10,290 on the hourly chart of the BTC/USD pair (data feed from Kraken).
- The pair could either rally again above $10,300 or it might extend its decline below the $10,100 support.
Bitcoin Holding Key Support
Recently, bitcoin made another attempt to climb above the $10,500 resistance area against the US Dollar. However, BTC price failed to continue higher and formed a short term top near $10,519.
Later, there was a downside correction below the $10,400 level. Moreover, yesterday’s ascending channel with support near $10,360 was breached on the hourly chart of the BTC/USD pair.
It opened the doors for more losses and the price spiked below the $10,200 support. It traded close to the $10,000 level, but the 100 hourly simple moving average acted as a strong buy zone.
A swing low is formed near the $10,057 and the price is currently consolidating in a range. Bitcoin recovered above the 23.6% Fib retracement level of the recent drop from the $10,519 high to $10,057 low.
More importantly, there is a key contracting triangle forming with resistance near $10,290 on the same chart. On the downside, the triangle support is near the $10,180 level.
The main support on the downside is near the $10,100 level, below which the price could continue to move down. In the mentioned case, the price is likely to revisit the $9,890 support area in the near term.
Fresh Rally?
On the upside, the triangle resistance is close to the 50% Fib retracement level of the recent drop from the $10,519 high to $10,057 low.
Therefore, an upside break above the $10,300 level might accelerate gains in bitcoin in the coming sessions. Having said that, the bulls need to push the price above the $10,325 level to revisit the $10,500 resistance.
Finally, a convincing break above the $10,500 level is likely to set the momentum for a run towards the $11,000 level.
Technical indicators:
Hourly MACD – The MACD is slowly moving into the bullish zone.
Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is currently struggling to stay above the 50 level.
Major Support Levels – $10,200 followed by $10,100.
Major Resistance Levels – $10,300, $10,400 and $10,500.
