Home CryptocurrencyAnalysis Bitcoin price pares gains, why $20,000 is the key to a new surge

Bitcoin price pares gains, why $20,000 is the key to a new surge

by SuperiorInvest

Bitcoin started a sharp downward correction below the $22,000 level against the US dollar. BTC needs to stay above the $20,000 support to avoid further losses.

  • Bitcoin failed to clear $22,750 and started a sharp move down.
  • The price is now trading below $21,000 and the 100 hourly simple moving average.
  • On the hourly chart of the BTC/USD pair (data feed from Kraken), there was a break below the key bullish trendline with support near $21,810.
  • The pair is consolidating above the $20,000 level with a minor bullish angle.

The price of Bitcoin dropped to $20,000

Bitcoin price tried to gain strength over Resistance levels at $22,000 and $22,500. The price even jumped above the $22,750 resistance zone and the 100 hourly simple moving average.

However, the price did not gain strength and peaked near the $22,768 level. As a result, there was a bearish wave below the $22,000 and $21,500 levels. There was also a move below the $21,000 level and 100 hour simple moving average.

Additionally, there was a break below a key bullish trendline with support near $21,810 on the BTC/USD hourly chart. Bitcoin price even tested the $20,000 zone. A low is forming near $19,921 and the price is now consolidating losses.

On the upside, immediate resistance is near the $20,600 level. It is near the 23.6% Fib retracement level of the recent decline from the $22,768 swing high to the $19,921 low.

Source: BTCUSD on TradingView.com

Another major resistance is located near the $21,350 level. This coincides with the 50% Fib retracement level of the recent decline from the $22,768 swing high to the $19,921 low. A close above the $21,350 resistance could start a new rally. In this case, the price can rise up to 22,000 USD. Any further gains could send the price to the $22,500 resistance zone.

More losses in BTC?

If Bitcoin fails to clear the $21,350 resistance zone, it may continue to move lower. Immediate downside support is near the $22,000 zone.

Another major support is near the $19,500 and $19,400 levels. A downside break below the $19,400 level may send the price towards the $18,500 support.

Technical indicators:

Hourly MACD – MACD is now losing momentum in the bearish zone.

Hourly RSI (Relative Strength Index) – RSI for BTC/USD is now recovering from oversold levels.

Major support levels – $20,000, followed by $19,400.

Major resistance levels – $20,600, $21,000 and $21,350.

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