Is This The Start Of Another Decline In Bitcoin Or Buy Opportunity?
- Bitcoin is slowly correcting lower below $10,000 and $9,850 against the US Dollar.
- The price even broke the $9,800 area and it might extend its downside correction.
- There is a key declining channel forming with resistance near $9,785 on the hourly chart of the BTC/USD pair (data feed from Kraken).
- There are chances of a bearish spike towards $9,500 before the bulls take a stand.
Bitcoin Could Extend its Correction
Recently, we saw a break above $10,000 in bitcoin against the US Dollar. However, BTC price failed to clear the $10,200 resistance and a new 2020 high was formed near $10,201.
The price started a downside correction below the $10,000 level and the 100 hourly simple moving average. Moreover, the bears were able to lead the price below the 50% Fib retracement level of the upward move from the $9,659 low to $10,201 high.
The recent decline was such that bitcoin even traded below the $9,850 support level. At the outset, there is a key declining channel forming with resistance near $9,785 on the hourly chart of the BTC/USD pair.
More importantly, the price is trading below the 76.4% Fib retracement level of the upward move from the $9,659 low to $10,201 high. Therefore, there is a risk of a downside extension below the $9,659 swing low in the near term.
The next major support for bitcoin bulls is seen near the $9,530 and $9,500 levels. In addition, the 1.236 Fib extension level of the upward move from the $9,659 low to $10,201 high is also near the $9,530 level.
Any further losses could set the pace for a larger bearish wave, possibly towards the $9,200 support area in the near term.
Bulls Are Still In Control
The recent decline in bitcoin could be seen as a part of a downside correction from the $10,201 swing high. The $9,500 support area could play a major role in the near term.
Its only when the price tumbles below $9,200 and $9,000, the bulls need to start worrying for a trend change to bearish.