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Bitcoin Reaches Crucial Juncture: Breakdown Below This Level Could Spark Vertical Drop

Bitcoin price failed to continue above the $9,500 resistance and declined recently against the US Dollar. BTC could either bounce back from $9,150 or it might decline heavily.

  • Bitcoin bulls are fighting hard to protect the key $9,200 and $9,150 support levels against the US Dollar.
  • The price remains at a risk of a sharp decline if there is a break below $9,150.
  • There is a declining channel forming with resistance near $9,320 on the hourly chart of the BTC/USD pair (data feed from Kraken).
  • The bulls need to gain momentum above $9,500 to avoid a breakdown below $9,150.

Bitcoin Testing Key Support

Yesterday, we saw a short term spike in bitcoin above the $9,500 resistance against the US Dollar. BTC even climbed above the $9,600 level and traded to a new 2020 high at $9,609.

However, the bulls failed to keep the price above the key $9,500 resistance. As a result, there was a fresh decline below the $9,400 level and the 100 hourly simple moving average.

Bitcoin price even traded below the $9,300 level and tested the $9,200 support area. A low is formed near $9,223 and the price is currently consolidating above the $9,220 and $9,200 support levels.

On the upside, an initial resistance is near the $9,320 level. Besides, the 23.3% Fib retracement level of the recent decline from the $9,609 high to $9,223 low is also near $9,320. More importantly, there is a declining channel forming with resistance near $9,320 on the hourly chart of the BTC/USD pair.

Bitcoin Price

Bitcoin Price

On the downside, there is a confluence of supports forming near the $9,200 level. If bitcoin fails to stay above the $9,200 and $9,150 support levels, there is a risk of a breakdown.

In the mentioned case, the price is likely to slide below the $9,000 support area. The next major support is near the $8,800 level, where the bulls are likely to take a stand.

Chances of Upside Break?

To start a decent upward move, bitcoin must climb above $9,300 and the channel resistance. The next resistance is seen near the $9,420 level. It coincides with the 50% Fib retracement level of the recent decline from the $9,609 high to $9,223 low.

A clear break above $9,420 and a close above the 100 hourly SMA might increase the chances of upside continuation above the $9,500 and $9,600 levels in the near term.

Technical indicators:

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

Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is currently sliding towards the 40 level.

Major Support Levels – $9,200 followed by $9,150.

Major Resistance Levels – $9,320, $9,420 and $9,500.

Bitcoin Reaches Crucial Juncture: Breakdown Below This Level Could Spark Vertical Drop was last modified: February 4th, 2020 by Aayush Jindal

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