Bitcoin struggled to break the $8,900 resistance on two occasions against the US Dollar. BTC price is showing a few bearish signs and it seems like it could decline towards $8,300 or $8,200.
Bitcoin price is likely forming a double top pattern near the $8,900 resistance against the US Dollar.The price is down 3% and it is now trading below the $8,700 support.There was a break below a key bullish trend line with support near $8,660 on the hourly chart of the BTC/USD pair (data feed from Kraken).The pair seems to be vulnerable and it could break the $8,500 support in the near term.
Bitcoin Could Correct Towards $8,200
Yesterday, Bitcoin extended its rally above the $8,500 resistance against the US Dollar. BTC price climbed towards $9,000, but it struggled to clear the $8,900 resistance area.
The bulls made two attempts to surpass the $8,900 resistance area, but they failed. As a result, there was a bearish reaction below the $8,700 and $8,660 support levels.
Moreover, there was a break below a key bullish trend line with support near $8,660 on the hourly chart of the BTC/USD pair. It is now trading below the 23.6% Fib retracement level of the upward move from the $8,040 swing low to $8,898 high.
An immediate support is another bullish trend line at $8,610 on the same chart. The first key support is near the $8,540 level (the previous breakout zone). If the price breaks the $8,540 support, it will most likely carve a double top near the $8,900 area.
In the mentioned bearish case, Bitcoin price is likely to slide below the 50% Fib retracement level of the upward move from the $8,040 swing low to $8,898 high.
The main target for the bears may perhaps be near the $8,240 and $8,200 support levels (double top target levels). Any further losses could lead BTC price towards $8,000.
What If BTC Stays Above $8,540?
If BTC stays above the neckline support at $8,540 and $8,500, it would invalidate the double top pattern. On the upside, an initial resistance is near the $8,700.
The key hurdle for Bitcoin is near $8,900, above which the bulls are likely to target the next important hurdle near the $9,200 and $9,250 levels.
Hourly MACD – The MACD is now gaining momentum in the bearish zone.
Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is now below 50 and it is showing a few bearish signs.
Major Support Levels – $8,610 followed by $8,500.
Major Resistance Levels – $8,700, $8,900 and $9,000.