Yesterday, bitcoin trimmed gains from well above $7,500 and declined below $7,300 against the US Dollar. Moreover, BTC price broke the $7,200 support area and the 100 hourly simple moving average.
However, the price remained stable above the $7,000 support area. A low was formed near $7,068 and the price started a decent upward move. It broke a couple of important resistances near $7,200 and $7,240.
Besides, the price settled above the $7,240 level and the 100 hourly simple moving average. On the upside, the price seems to be facing a strong resistance near the $7,400 and $7,440 levels.
The last swing high was near $7,487 and the recent low was near $7,256. At the outset, the price is trading above the 50% Fib retracement level of the recent slide from the $7,487 high to $7,256 low.
Though, the $7,400 area is acting as a resistance. Additionally, the 61.8% Fib retracement level of the recent slide from the $7,487 high to $7,256 low is preventing an upside break.
More importantly, there is a major breakout pattern forming with resistance near $7,440 on the hourly chart of the BTC/USD pair. Therefore, an upside break above $7,400 and $7,440 is likely to set the pace for another increase in the near term.
The next major resistance is near the $7,580, above which the price is likely to test the $7,800 area. Conversely, the price could trade below the triangle support at $7,320 and the 100 hourly SMA.
In the bearish case, the $7,240 support holds a lot of importance. If there is a downside break below $7,240, the price is likely to accelerate towards the $7,000 support area.
Looking at the chart, bitcoin price seems to be setting up for the next major bullish break above $7,440. If it fails to climb above $7,440, the bears are likely to take control.