Bitcoin Price is Recovering But 100 SMA Could Trigger Another Sharp Drop

Bitcoin started a major decline after it was rejected near the $10,000 resistance against the US Dollar. BTC is currently recovering, but it is likely to face sellers near the 100 SMA (H4).

  • Bitcoin traded as low as $9,084 and it is currently correcting higher.
  • The price is likely to face sellers near the $9,600 level and the 100 simple moving average (4-hours).
  • There is a major bearish trend line forming with resistance near $9,770 on the 4-hours chart of the BTC/USD pair (data feed from Kraken).
  • The pair remains at a risk of more losses as long as it is below $9,600 and $9,700.

Bitcoin Turns Red

This past week, bitcoin failed to settle above the $10,000 resistance zone against the US Dollar. BTC price traded as high as $9,989 and started a major decline below the $9,900 and $9,800 levels.

The bears took control and were able to push the price below the $9,500 support and the 100 simple moving average (4-hours). The decline was initiated after there was a break below a key ascending channel with support near the $9,780 level on the 4-hours chart of the BTC/USD pair.

Bitcoin Price
Bitcoin Price

The decline was such that the pair broke the $9,200 support and traded as low as $9,084. Bitcoin is currently correcting higher and trading above the $9,300 level.

It surpassed the 23.6% Fib retracement level of the downward move from the $9,989 swing high to $9,084 low. On the upside, an initial resistance is near the $9,500 and $9,540 levels.

The 50% Fib retracement level of the downward move from the $9,989 swing high to $9,084 low is also near $9,537. The first major resistance is near the $9,600 level and the 100 simple moving average (4-hours).

There is also a major bearish trend line forming with resistance near $9,770 on the same chart. Therefore, the price must break the 100 SMA (H4) and then the trend line to move into a positive zone.

More Losses in BTC?

If bitcoin fails to clear the $9,500 resistance zone or the 100 simple moving average (4-hours), it could resume its decline below the $9,400 level.

The first key support is seen near the $9,300 level, below which it could retest the $9,080 zone. The main support is seen near the $9,000 level, where the bulls might take a stand.

Technical indicators

4 hours MACD – The MACD for BTC/USD is slowly moving in the bullish zone.

4 hours RSI (Relative Strength Index) – The RSI for BTC/USD is currently just above the 40 level.

Major Support Level – $9,300

Major Resistance Level – $9,600

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Source: Newsbtc

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