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Bitcoin Reaches Crucial Juncture: Here’s What Could Trigger A Sharp Decline

Bitcoin 2020/09/16 06:08 by Aayush Jindal

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

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

Bitcoin Price is Approaching Crucial Resistance

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

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

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

Bitcoin Price

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

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

Downside Break in BTC?

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

A clear break below the $10,650 support zone could lead the price towards the $10,500 support. Any further losses may perhaps start a sustained downward move and the price could dive towards the $10,000 support or even $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.

Major Support Levels – $10,650, followed by $10,500.

Major Resistance Levels – $10,800, $10,850 and $11,000.

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