Bitcoin Attempts Recovery, Why 100 SMA Holds The Key
Bitcoin price extended its decline below $32,000 before recovering higher against the US Dollar. BTC is back above $32,500, but it must clear the 100 hourly SMA to continue higher.
Bitcoin started an upside correction after it traded towards the $31,500 zone.
The price is now trading near $33,000 and the 100 hourly simple moving average.
There was a break above a key bearish trend line with resistance near $32,500 on the hourly chart of the BTC/USD pair (data feed from Kraken).
The pair must settle above $33,250 and the 100 hourly SMA to continue higher in the near term.
Bitcoin Price is Facing Hurdles
Yesterday, bitcoin price extended its decline below the $32,200 and $32,000 support levels. BTC even spiked towards $31,500 and it settled well below the 100 hourly simple moving average.
It traded as low as $31,560 before it started an upside correction. There was a break above the $32,000 and $32,200 resistance levels. Bitcoin climbed above the 23.6% Fib retracement level of the recent drop from the $34,530 swing high to $31,560 low.
There was also a break above a key bearish trend line with resistance near $32,500 on the hourly chart of the BTC/USD pair. The pair is now trading near $33,000 and the 100 hourly simple moving average.
Source: BTCUSD on TradingView.com
The 50% Fib retracement level of the recent drop from the $34,530 swing high to $31,560 low is also acting as a resistance for the bulls. To start a decent increase, the price must settle above the $33,200 level and the 100 hourly SMA. The next major resistance sits near $33,500.
Fresh Decline in BTC?
If bitcoin fails to recover above the $33,000 and $33,200 resistance levels, there is a risk of a fresh decline. An initial support on the downside is near the $32,500 level.
The first major support is now near the $32,000 zone. The main support is now forming near the $31,500 zone. A close below the $31,500 level could put a lot of pressure on the bulls. In the stated case, the price is likely to dive further towards the $30,000 level.
Hourly MACD – The MACD is struggling to gain pace in the bullish zone.
Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is now just above the 50 level.
Major Support Levels – $32,200, followed by $32,000.
Major Resistance Levels – $33,200, $33,500 and $34,000.