Bitcoin Takes a Big Hit: Main Reasons Why Recovery Could Face Sellers

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Bitcoin is down more than 5% and it broke the key $9,300 support zone against the US Dollar. BTC traded as low as $9,089 and it is currently correcting higher towards hurdles.

  • Bitcoin declined sharply after it was rejected one more time near the $10,000 level.
  • There was a break below many key supports near $9,500 and $9,300.
  • There is a short term contracting triangle forming with resistance near $9,340 on the hourly chart of the BTC/USD pair (data feed from Kraken).
  • The pair could correct further, but upsides are likely to face sellers near $9,400 and $9,500.

Bitcoin Price Turns Red

After another crucial rejection near the $10,000 level, bitcoin price started a major bearish wave against the US Dollar. BTC gained bearish momentum below the $9,800 and $9,500 support levels.

It weakened more than 5% to settle below the $9,500 level and the 100 hourly simple moving average. The decline was such that the price even broke the $9,300 support and traded to a new weekly low at $9,089.

Bitcoin is currently correcting higher and trading above the $9,250 level. It surpassed the 23.6% Fib retracement level of the recent decline from the $9,988 high to $9,089 low. It seems like there is a short term contracting triangle forming with resistance near $9,340 on the hourly chart of the BTC/USD pair.

Bitcoin Price
Bitcoin Price

The pair could correct further above the triangle resistance and $9,350. However, the pair is likely to face a lot of hurdles near the $9,400 and $9,500 levels (the previous key supports).

The next key resistance could be near the $9,540 level or the 50% Fib retracement level of the recent decline from the $9,988 high to $9,089 low. Any further gains could decrease the bearish pressure and the price might recover towards the $9,800 resistance.

More Losses in BTC?

Once bitcoin price completes the current correction wave near $9,400 or $9,500, it is likely to resume its decline. An initial support on the downside is near the $9,300 level.

The next major support is near the $9,100 level, below which there is a risk of more losses below the $9,000 handle in the coming sessions. In the stated case, the price could revisit $8,800.

Technical indicators:

Hourly MACD – The MACD is slowly reducing its bearish slope and it could move into the bullish zone.

Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is currently recovering higher towards 40.

Major Support Levels – $9,300 followed by $9,100.

Major Resistance Levels – $9,400, $9,500 and $9,540.