Here’s Why Bitcoin Bears Must Wait for $6K Considering A Correction Is Due
Bitcoin is showing signs of a decent recovery above $5,000 against the US Dollar. BTC price could recover further towards the $6,000 resistance, where the bears are likely to take a stand.
Bitcoin is slowly rising and it is trading nicely above $5,200 against the US Dollar.
A break above $5,600 is likely to lead the price towards the $6,000 resistance.
There is a short term contracting triangle forming with resistance near $5,600 on the hourly chart of the BTC/USD pair (data feed from Kraken).
The pair could test the $6,000 resistance area, which is a major hurdle for more upsides.
Bitcoin Could Test and Fail Near $6,000
After a short term downside correction, bitcoin found support near the $4,350 area against the US Dollar. BTC price recovered in the past few sessions and climbed back above the $5,000 resistance level.
The recent recovery was positive since the price was able to clear the 50% Fib retracement level of the key drop from the $6,000 swing high to $4,333 low. The bulls were able to push the price above the $5,200 resistance and the 100 hourly simple moving average.
Bitcoin is now trading in a positive zone above the $5,350 level. An initial resistance on the upside is near the $5,600 level. More importantly, there is a short term contracting triangle forming with resistance near $5,600 on the hourly chart of the BTC/USD pair.
The triangle resistance is close to the 76.4% Fib retracement level of the key drop from the $6,000 swing high to $4,333 low. Therefore, a clear break above the $5,600 resistance could open the doors for a push towards the $6,000 level.
Any further gains could lead the price towards the $6,395 level. It represents the 1.236 Fib extension level of the key drop from the $6,000 swing high to $4,333 low.
Recovery Remains Capped
If bitcoin corrects higher, it is likely to face hurdles near the $6,000 resistance zone. The bears are likely to take a strong stand near $6,000 and $6,050.
The main hurdle is near the $6,400 and $6,500 levels, above which the bulls are likely to have an upper hand. If they fail to lead the price above $6,000 and $6,500, there are high chances of another bearish wave in the near term.
Hourly MACD – The MACD is about to move into the bullish zone.
Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is currently rising and it is above the 50 level.
Major Support Levels – $5,200 followed by $5,000.
Major Resistance Levels – $5,600, $5,950 and $6,000.