Here’s Why Bitcoin Could Correct To $6.5K Before A Fresh Rally

Bitcoin surged above the $7,000 resistance and reached the $7,200 bullish target against the US Dollar. BTC price is currently correcting lower and it could test the $6,500 support area.

  • Bitcoin rallied significantly above the $6,800 and $7,000 resistance levels against the US Dollar.
  • The price tested the $7,200 target (as discussed yesterday) before correcting lower.
  • There is a key bullish trend line forming with support near $6,715 on the hourly chart of the BTC/USD pair (data feed from Kraken).
  • The pair could correct lower towards the $6,500 support before it starts a fresh increase.

Bitcoin Turns Green

Yesterday, we discussed the chances of more upsides in bitcoin after it broke the key $6,500 and $6,600 resistance levels against the US Dollar. BTC did trade higher and broke many important resistances, starting with $6,800.

The bulls gained pace and the price rallied above the $7,000 resistance. The price tested the $7,200 target (as discussed yesterday) and settled well above the 100 hourly simple moving average.

A new weekly high is formed near the $7,273 and the price is currently correcting lower. It broke the $7,000 level, plus the 23.6% Fib retracement level of the recent surge from the $6,156 low to $7,273 high.

Bitcoin even traded below the $6,800 support area. However, the decline was protected by the $6,700 region. It seems like there is a key bullish trend line forming with support near $6,715 on the hourly chart of the BTC/USD pair.

Bitcoin Price

Bitcoin Price

The 50% Fib retracement level of the recent surge from the $6,156 low to $7,273 high is also acting as a strong support. If the price fails to stay above the trend line support and $6,700, it could extend its downside correction.

The main support is now forming near the $6,500 area (the recent breakout zone), where the bulls are likely to take a strong stand in the coming sessions.

More Upsides

If bitcoin remains well bid above the $6,700 and $6,500 support levels, it is likely to continue higher. An initial resistance is near the $7,000 level.

The next key resistance is near the $7,200 level, above which the price is likely to surpass the recent high of $7,273. Any further gains could lead the price towards the $7,500 resistance.

Technical indicators:

Hourly MACD – The MACD is slowly gaining momentum in the bearish zone.

Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is still well above the 50 level.

Major Support Levels – $6,700 followed by $6,500.

Major Resistance Levels – $6,900, $7,000 and $7,200.

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Source: Newsbtc

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