Bitcoin price traded to a new multi-month high near $15,970 before correcting lower against the US Dollar. BTC is holding the $14,500 support and it could start another rally.

• Bitcoin started a sharp downside correction after trading close to the $16,000 resistance.
• The price corrected lower below $15,000, but it is still well above the 100 simple moving average (4-hours).
• There is a major contracting triangle forming with resistance near $15,250 on the 4-hours chart of the BTC/USD pair (data feed from Kraken).
• The pair could resume its rally once it clears the $15,250 and $15,300 resistance levels.

Bitcoin Price is Holding Key Support

This past week, bitcoin started a strong surge above the $14,500 and $15,000 resistance levels against the US Dollar. The BTC/USD pair even rallied above $15,500 and settled well above the 100 simple moving average (4-hours).

It traded close to the $16,000 level and formed a new multi-month high at $15,971 before starting a sharp downside correction. There was a break below the $15,500 support level.

Bitcoin price declined below the 50% Fib retracement level of the upward move from the $13,558 swing low to $15,971 high. However, the bulls were able to defend the $14,500 support zone and the price remained well above the 100 simple moving average (4-hours).

It also stayed above the 61.8% Fib retracement level of the upward move from the $13,558 swing low to $15,971 high. It seems like there is a major contracting triangle forming with resistance near $15,250 on the 4-hours chart of the BTC/USD pair.

To start a fresh rally, the price must break the triangle resistance zone and the $15,300 level. The next major resistance is near $15,500, above which the bulls are likely to aim a test of $16,000.

Downsides Could Be Limited in BTC

If bitcoin fails to clear triangle resistance, it could correct lower below $14,800. The first major support is near the triangle lower trend line and $14,500.

A clear break below the triangle support could lead the price towards the $14,000 support zone. The next major support is near the $13,750 level or the 100 simple moving average (4-hours).

Technical indicators

4 hours MACD – The MACD for BTC/USD is slowly losing pace in the bearish zone.

4 hours RSI (Relative Strength Index) – The RSI for BTC/USD is back above the 50 level.

Major Support Level – $14,500

Major Resistance Level – $15,300