- Bitcoin price reversed its losses and settled above $7,000 against the US Dollar.
- The price rallied close to the $7,500 resistance area, where sellers emerged.
- Earlier, there was a break above a key bearish trend line with resistance near $6,700 on the hourly chart of the BTC/USD pair (data feed from Kraken).
- A correction is underway, but there are many supports near $7,150, $7,000 and $6,950.
Bitcoin price is up more than 10% and showing signs of a strong reversal against the US Dollar. However, BTC must continue above $7,500 to start a larger rally.
Bitcoin Price Analysis
After a steady decline, bitcoin spiked below the $6,600 and $6,500 support levels against the US Dollar. However, losses in BTC were limited below $6,500 (as warned in yesterday’s post – Bitcoin (BTC) Bears Remain in Driver’s Seat but Bulls Not Done Yet).
A new monthly low was formed near $6,435 before the price started a strong reversal. There was a sharp rally and the price surged above many resistances near $6,800 and $7,000.
Moreover, there was a break above a key bearish trend line with resistance near $6,700 on the hourly chart of the BTC/USD pair. The pair even settled above $7,000 and the 100 hourly simple moving average.
Finally, it spiked above the $7,200 and $7,300 resistance levels. Bitcoin traded close to the $7,500 level and a new intraday high was formed near $7,487. At the moment, the price is correcting gains below $7,300.
Additionally, there was a break below the 23.6% Fib retracement level of the recent upsurge from the $6,435 low to $7,487 high. On the downside, there are many supports near $7,150, $7,100 and $7,000.
The main support is near the $6,950 level and the 100 hourly simple moving average. Besides, the 50% Fib retracement level of the recent upsurge from the $6,435 low to $7,487 high is near the $6,960 level.
Therefore, dips remain well supported on the downside near the $7,000 and $6,950 levels. On the upside, the price is facing key hurdles near $7,400 and $7,500. A successful daily close above $7,500 would make the case for a larger rally towards $8,000 and $8,200.
Looking at the chart, bitcoin price is clearly showing a lot of positive signs above the $7,000 level. In the short term, there could be a downside reaction, but the bulls are likely to protect losses below $6,950.
Technical indicators:
Hourly MACD – The MACD is slowly moving into the bearish zone.
Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is now well above the 50 level.
Major Support Levels – $7,100 followed by $7,000.
Major Resistance Levels – $7,300, $7,400 and $7,500.