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Bitcoin started a strong downside correction from the $9,945 high against the US Dollar. BTC tested the $8,800 support area and it is currently correcting higher.
- Bitcoin is trading above the key $8,800 and $9,000 support levels.
- The price is facing a couple of key hurdles near the $9,400 and $9,500 levels.
- There is a major declining channel forming with resistance near $9,560 on the 4-hours chart of the BTC/USD pair (data feed from Kraken).
- The pair must surge above $9,500 and $9,560 to avoid more losses in the near term.
Bitcoin Trading Above Key Supports
This past week, bitcoin formed a key short-term top just below the $10,000 level against the US Dollar. BTC price traded as high as $9,945 before it started a major decline.
There was a sharp slide below the $9,500 and $9,250 support levels. The price even broke the $9,000 support and settled below the 100 simple moving average (4-hours). It tested the $8,800 support level and formed a low at $8,806.
Bitcoin price is currently correcting higher and trading above $9,000. It surpassed the 23.6% Fib retracement level of the recent decline from the $9,945 high to $8,806 low.
On the upside, there is a major hurdle forming near the $9,400 level and the 100 simple moving average (4-hours). The 50% Fib retracement level of the recent decline from the $9,945 high to $8,806 low is also near $9,375 to stop the current move.
More importantly, there is a major declining channel forming with resistance near $9,560 on the 4-hours chart of the BTC/USD pair. If the pair climbs above the $9,400 resistance, it could face a strong resistance near the $9,500 and $9,560 levels.
To move back into a positive zone, the price must climb above $9,400 and then gain pace above the channel resistance zone. The next key resistance is near the $9,800 level and $10,000 levels.
More Losses?
If bitcoin fails to stay clear the $9,400 resistance, the 100 simple moving average (4-hours), and $9,500, there is a risk of more losses in the near term.
In the mentioned case, the price is likely to decline below the $9,000 support. The main support is near the $8,800 level, below which the bears are likely to aim a test of the $8,400 level.
Technical indicators
4 hours MACD – The MACD for BTC/USD is losing pace in the bullish zone.
4 hours RSI (Relative Strength Index) – The RSI for BTC/USD is currently near the 45 level.
Major Support Level – $9,000
Major Resistance Level – $9,500
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