Bitcoin made gains and declined below $21,000 against the US Dollar. BTC should stay above $20,500 to avoid a major downside in the near term.
- Bitcoin failed to stay above the $21,000 support and extended decline.
- The price is now trading below the $21,500 level and the 100 hourly simple moving average.
- There is a major bullish trend line forming with support near $20,520 on the hourly chart of the BTC/USD pair (data feed from Kraken).
- If there is a clear move below $20,500, the pair can start another major decline.
bitcoin price reaches support
Bitcoin price attempted to close above the $22,000 level, but the bears remained active. As a result, there was a slow and steady decline below the $21,500 level.
The price declined below the 50% Fib retracement level of the upward move from the $19,300 low to $22,498 high. The price is now trading below the $21,500 level and the 100 hourly simple moving average.
It is testing the key $20,500 support area. There is also a major bullish trend line forming with support near $20,520 on the hourly chart of the BTC/USD pair. The trend line is near the 61.8% Fib retracement level of the upward move from $19,300 low to $22,498 high.
If bitcoin price stays above the trend line, it could correct above $20,800. On the upside, the price is facing resistance near $20,800 and $20,850.
Source: BTCUSD on TradingView.com
The next major resistance is near the $21,250 area and the 100 hourly simple moving average. Above the $21,250 resistance area could set the pace for a test of the $22,000 level. Any further gains could open the doors for a move towards the $22,500 level. The next major resistance is near the $23,200 level.
Downside Break in BTC?
If bitcoin fails to stay above the trend line support, it could continue to decline below $20,500. On the downside, immediate support is near the $20,050 level.
The next major support is now near the $19,600 level or the last swing low. A break below the $19,600 support area could propel the price towards $19,000. In the said case, there is a risk of a move towards the $18,500 level.
Technical Indicators:
Hourly MACD – The MACD is now gaining momentum in the bearish zone.
Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is now in the oversold zone.
Key Support Level – $20,500, followed by $20,000.
Major resistance levels – $20,800, $21,250 and $22,000.