Bitcoin Saw A Key Technical Breakdown: Here’s Why BTC Could Decline Further
Bitcoin2020/05/22 05:58 by Aayush Jindal
Bitcoin started a strong decline after it broke the key $9,500 support against the US Dollar. BTC price is currently correcting higher from the $8,794 low, but upsides are likely to remain capped.
Bitcoin is down more than 5% and it broke many key supports near $9,500 and $9,150.
The price is now trading well below the $9,250 pivot level and the 100 hourly simple moving average.
There is a key connecting bearish trend line forming with resistance near $9,220 on the hourly chart of the BTC/USD pair (data feed from Kraken).
The pair is likely to face a strong selling interest near the $9,220, $9,250 and $9,300 levels.
Bitcoin Turns Red
Bitcoin price started a strong decline after it failed to climb above $9,800 against the US Dollar. BTC price broke many supports near $9,540 and $9,500 to enter a bearish zone (as discussed yesterday).
There was a sharp slide below the $9,250 and $9,150 support levels. It even dived below $9,000 and settled well below the 100 hourly simple moving average. It traded to a new weekly low at $8,794 before starting an upside correction.
Bitcoin recovered above the $9,000 resistance level. It also managed to recover above the 23.6% Fib retracement level of the recent slide from the $9,842 high to $8,794 low.
On the upside, there are many hurdles forming near the $9,220, $9,250 and $9,300 levels. There is also a key connecting bearish trend line forming with resistance near $9,220 on the hourly chart of the BTC/USD pair.
The trend line is close to the 50% Fib retracement level of the recent slide from the $9,842 high to $8,794 low. Therefore, the price is likely to face a strong selling interest near the $9,220, $9,250 and $9,300 levels in the near term.
BTC’s Bearish Extension
If bitcoin fails to correct above the $9,150 and $9,250 resistance levels, it is likely to continue lower. An initial support on the downside is near the $9,000 level.
A daily close below the $9,000 level might start another bearish wave. The next key support is near the $8,800 level, below which the price is likely to dive towards the $8,500 support zone. Any further losses may perhaps lead the price towards $8,200.
Hourly MACD – The MACD is currently in the bullish zone, but it could turn bearish again.
Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is currently recovering towards the 45 level.
Major Support Levels – $9,000 followed by $8,800.
Major Resistance Levels – $9,130, $9,250 and $9,300.
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