Bitcoin (BTC) Shows Signs of Important Reversal To $8K
Bitcoin price is recovering and it recently broke the main $7,375 and $7,400 resistances against the US Dollar.
The price is likely to start a strong rise to $8,000 once it clears the $7,700 resistance.
There is a short term contracting triangle forming with resistance near $7,540 on the hourly chart of the BTC/USD pair (data feed from Kraken).
The recent rise was triggered after the price surpassed yesterday’s bullish flag resistance at $7,100.
Bitcoin price is slowly moving into a positive zone against the US Dollar. BTC seems to be aiming a test of the $8,000 resistance level in the coming days.
Bitcoin Price Analysis
Yesterday, we saw a nice recovery wave in bitcoin above the $7,200 resistance against the US Dollar. However, BTC price struggled to climb above the $7,375 and $7,400 resistance levels.
Later, there was a minor downside correction, but the price remains well bid above the $7,000 level. As a result, there was a fresh increase above the $7,200 resistance.
Moreover, the price surpassed yesterday’s bullish flag resistance at $7,100 on the hourly chart. It opened the doors for an upside break above the key $7,375 and $7,400 resistance levels.
Bitcoin price even rallied above the $7,500 resistance and traded close to the next key resistance near $7,700 (as pointed out in the weekly forecast). A high was formed near $7,676 and the price is currently correcting lower.
It broke the $7,600 level, but holding the 23.6% Fib retracement level of the recent upward move from the $6,857 low to $7,676 high. Additionally, there is a short term contracting triangle forming with resistance near $7,540 on the same chart.
Therefore, there are two possible scenarios – first, the price resumes its rise above the $7,600 and $7,700 resistance level. In the mentioned case, the bulls are likely to aim the $8,000 resistance.
Conversely, the price could correct further lower below the $7,450 support. The next support is near the $7,340 level. The main support is near the $7,260 level since it is the 50% Fib retracement level of the recent upward move from the $6,857 low to $7,676 high.
Looking at the chart, bitcoin price is showing positive signs above the $7,400 level. In the short term, there could be a downside correction towards $7,340 or $7,260, but dips are likely to remain well bid. If not, the price may possibly revisit the $7,000 support area.
Hourly MACD – The MACD is slowly moving back into the bearish zone.
Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is currently correcting lower towards the 50 level.
Major Support Levels – $7,340 followed by $7,260.
Major Resistance Levels – $7,540, $7,600 and $7,700.
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