Bitcoin Holds Key Support, Here’s What Could Trigger A Sharp Decline

Bitcoin price failed to clear the $58,500 resistance against the US Dollar. BTC is correcting lower and it could decline heavily if there is a break below $55,500

Bitcoin struggled to clear the $58,500 resistance and started a fresh decline.
The price is now trading below the $57,000 level and the 100 hourly simple moving average.
There is a key rising channel forming with support near $56,000 on the hourly chart of the BTC/USD pair (data feed from Kraken).
The pair could decline heavily if there is a close below $56,000 and $55,500.

Bitcoin Price is Testing Key Support
Bitcoin climbed again above the $58,000 level, but the bulls struggled to remain in action. BTC formed a short-term top near the $58,500 level and it recently started a downward move.
There was a break below the $57,000 and $56,000 levels. The price even spiked below the $55,500 support level and a low is formed near $55,294. It is now trading below the $57,000 level and the 100 hourly simple moving average.
Bitcoin is attempting a recovery above the $56,000 level. It broke the 23.6% Fib retracement level of the recent decline from the $58,418 high to $55,294 low. There is also a key rising channel forming with support near $56,000 on the hourly chart of the BTC/USD pair.

Source: BTCUSD on TradingView.com
It is now facing resistance near the $56,500 level and the 100 hourly simple moving average. The next resistance sits near the $56,800 level. It is close to the 50% Fib retracement level of the recent decline from the $58,418 high to $55,294 low.
If there is an upside break above the $56,800 and $57,000 levels, the price could rise further. The next key resistance is near the $58,500 level.
More Losses in BTC?
If bitcoin fails to clear the $56,500 resistance or $56,800, it could continue to move down. An initial support on the downside is near the $56,000 level and the channel zone.
The first key support is near the $55,250 level, below which the price might test $55,000. Any more losses could open the doors for a drop towards the $52,500 level in the near term.
Technical indicators:
Hourly MACD – The MACD is struggling to move into the bullish zone.
Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is now just below the 50 level.
Major Support Levels – $56,000, followed by $55,250.
Major Resistance Levels – $56,800, $58,500 and $60,000.

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