Yesterday, we discussed why a break above the $7,000 resistance is looming for bitcoin against the US Dollar. BTC price did gain traction and was able to surpass the $6,980 and $7,000 resistance levels.
It seems like the bulls were able to gain control after the price tumbled to a new yearly low of $3,932 in March 2020. The price climbed higher nicely above the 23.6% Fib retracement level of the last main decline from the $10,537 high to $3,932 low.
Bitcoin is now trading nicely above the $6,500 and $7,000 resistance levels. It is testing the 50% Fib retracement level of the last main decline from the $10,537 high to $3,932 low.
On the upside, there is a significant resistance waiting near the $8,000 level and the 100-day simple moving average. There is also a key bearish trend line forming with resistance near $7,880 on the daily chart of the BTC/USD pair.
If the bulls are able to clear the $8,000 resistance and the 100-day SMA, it could start a medium term uptrend. The next key resistance is near the $8,800 and $9,000 levels, above which BTC might surge towards the $9,500 level.
Failure Near $8,000?
There are also high chances of bitcoin failing near the $8,000 resistance area. If there is a rejection near $8,000 or $7,880, the price could start a downside correction.
An initial support is near the $6,800 level (the recent breakout zone). The main support is now near the $6,500 level, where the bulls are likely to take a stand. Any further losses may perhaps lead the price towards $5,500.