Bitcoin Price Analysis: BTC Struggles at a Critical Support Level
Today, bitcoin dropped by a sharp 4.8% and reached as low as $54,650. However, the cryptocurrency is back trading at around $56,000 as it found solid support at the 20-day MA which allowed it to rebound.
A quick recap: Bitcoin’s price decreased to as low as $47,000 (.5 Fib) over the past two weeks but it has since recovered a lot of the losses. As can be seen on the short-term charts, BTC was trading inside an ascending price channel over the week as it reached the February 2021 highs at $58,355 by the beginning of May. Yesterday, the price reached $59,000 but the momentum started to fade and bitcoin headed lower.
Today, the sharp 4.6% price drop caused bitcoin to fall through the lower boundary of the ascending price channel. It continued beneath $56,000 until finding support at $55,400, which stalled the decline. There is also a parallel trend line to the ascending price channel and the 20-day MA here that bolstered the support.
BTC Price Support and Resistance Levels to Watch
Key Support Levels: $55,400, $54,050, $53,000, $51,600, $50,000.
Key Resistance Levels: $56,835, $58,355, $59,000, $60,000, $61,780.
Looking ahead, the first support lies at $55,400 (the parallel trend line). This is followed by $54,430 (.382 Fib), $53,000 (.5 Fib), and $51,600 (.618 Fib & 100-days MA).
On the other side, the first resistance lies at $56,835 (50-days MA). This is followed by $58,355 (Feb 2021 Highs), $59,000, $60,000, and $61,780 (March 2021 Highs).
The technical indicators do not look very promising. The 20-day MA crossed beneath the 50-day MA toward the end of April for the first time since October 2020. This could be the first signal that the long-term bullish momentum is starting to reverse.
Additionally, the RSI has now returned back to the midline as the market reaches a point of indecision. A break beneath the 50 level will see the bearish momentum increasing and is likely to push bitcoin back toward $50,000.
Bitstamp BTC/USD Daily Chart
Bitstamp BTC/USD 4-Hour Chart
Binance Futures 50 USDT FREE Voucher: Use this link to register & get 10% off fees and 50 USDT when trading 500 USDT (limited offer).
PrimeXBT Special Offer: Use this link to register & enter POTATO50 code to get 50% free bonus on any deposit up to 1 BTC.
Disclaimer: Information found on CryptoPotato is those of writers quoted. It does not represent the opinions of CryptoPotato on whether to buy, sell, or hold any investments. You are advised to conduct your own research before making any investment decisions. Use provided information at your own risk. See Disclaimer for more information.
Cryptocurrency charts by TradingView.