Bitcoin is gaining bullish momentum above $7,000 and $7,200 against the US Dollar.
The price is likely to face a strong resistance near $8,000 and the 100-day simple moving average.
There was a break above a crucial bearish trend line with resistance near $7,040 on the daily chart of the BTC/USD pair (data feed from Kraken).
The pair could either extend its rally above $8,000 to $9,000 or it might face rejection.
Bitcoin Price is Facing Huge Resistance
There was a slow and steady recovery in bitcoin from the $3,932 swing low against the US Dollar. BTC price broke many hurdles in the past few days and settled above the $6,000 resistance area.
The current upward move gained pace above the $6,500 and $7,000 resistance levels. There was also a break above the 50% Fib retracement level of the key decline from the $10,500 swing high to $3,921 swing low.
More importantly, there was a break above a crucial bearish trend line with resistance near $7,040 on the daily chart of the BTC/USD pair. The pair is now trading above the key $7,200 and $7,500 resistance levels.
Bitcoin Price
On the upside, there is a significant resistance waiting near the $8,000 level. The 100-day simple moving average is close to the $8,000 level to act as a resistance. The 61.8% Fib retracement level of the key decline from the $10,500 swing high to $3,921 swing low is also near $7,989.
A successful daily close above the $8,000 resistance and the 100-day SMA could open the doors for a larger rally. In the mentioned case, the price is likely to rise towards the $8,950 and $9,000 levels.
Fresh Decline?
If bitcoin price fails to continue above the $8,000 resistance or the 100-day SMA, it could start a fresh decline. An initial support on the downside is near the $7,200 level (the recent breakout zone).
A bearish break below the $7,200 support might lead the price towards the $6,800 support. Any further losses could initiate a drop towards the $6,200 support area in the coming days.
Technical indicators:
Daily MACD – The MACD is currently gaining momentum in the bullish zone.
Daily RSI (Relative Strength Index) – The RSI for BTC/USD is now well above the 50 level.
Major Support Levels – $7,200 followed by $6,200.
Major Resistance Levels – $8,000, $8,400 and $9,000.