Crypto

Bitcoin is reaching a crucial node: here’s what could cause a sharp decline

Bitcoin


Bitcoin price extended its rise above the USD 10,800 resistance against the US dollar. However, BTC is struggling to break the all-important $ 11,000 barrier and it could fall sharply.

  • Bitcoin traded above the USD 10,700 and USD 10,800 resistance levels.
  • The price is still trading well below the $ 11,000 threshold, but above the 100-hour simple moving average.
  • A crucial contracting triangle is forming with resistance near USD 10,800 on the hourly chart of the BTC / USD pair (Kraken data feed).
  • The pair could break the USD 11,000 barrier or drop sharply below the USD 10,650 support region.

Bitcoin price is approaching crucial resistance

There was an upward extension in bitcoin price above the USD 10,700 resistance against the US dollar. BTC even broke the USD 10,800 resistance level and settled nicely above the 100 simple hourly moving average.

The price traded as high as $ 10,935 and it looks like the $ 11,000 barrier is already in play. Bitcoin is down more than USD 200 from its recent high and tested the USD 10,650 support. A low is forming near USD 10,671 and the price is currently consolidating losses.

It tests the 23.6% Fib retracement level of the recent drop from the high of $ 10,935 to the low of $ 10,671. It looks like a crucial contracting triangle is forming with resistance near USD 10,800 on the hourly chart of the BTC / USD pair.

Bitcoin price trades above $10,800. Source: TradingView.com

If there is an upside break above the USD 10,800 resistance, the price could break the USD 10,935 high and stay higher. On the upside, there is a major hurdle for the bulls near the USD 11,000 level (as discussed in the weekly analysis). A successful close above the USD 11,000 resistance is a must to start a surge.

Downside in BTC?

If bitcoin fails the USD 10,800 resistance or struggles to test the USD 11,000 hurdle, there is a risk of a sharp decline. An initial support on the downside is near the triangle trendline and USD 10,650.

A clear break below the USD 10,650 support zone could move the price towards the USD 10,500 support. Any further losses could perhaps trigger a sustained downward movement and the price could plunge towards USD 10,000 support or even USD 9,880.

Technical indicators:

Hourly MACD – The MACD is currently gaining pace in the bearish zone.

Hourly RSI (Relative Strength Index) – The RSI for BTC / USD is currently just below the 50 level.

Key Support Levels – USD 10,650, followed by USD 10,500.

Key Resistance Levels – USD 10,800, USD 10,850 and USD 11,000.



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