Bitcoin Price Analysis: BTC/USD Nosedives Below Key Support

Bitcoin price declined sharply after failing near $7,410 against the US Dollar. BTC/USD dropped more than $500 and broke a few key supports near $7,380 and $7,100.

Important points

• Bitcoin faced a strong resistance recently near the $7,400-7,410 area and declined sharply.
• BTC/USD broke an important bullish trend line with support at $7,380 on the 2-hours chart.
• BTC price also broke the $7,100 support area and is now approaching the $6,860 support.

Bitcoin price analysis

Bitcoin price was in a decent uptrend as it traded above the $7,280 and $7,320 resistance levels against the US Dollar. BTC/USD even traded a few points above the $7,400 level before sellers appeared.

The 2-hours chart of BTC price indicates that the price topped near the $7,409 level and started a major downside move. There was a clear bullish trend exhaustion around $7,400, resulting in a bearish reaction.

During the decline, the pair broke an important bullish trend line with support at $7,380 on the same chart. It opened the doors for sellers to take control, resulting in a push below the key support at $7,100.

The price even broke the 50% Fibonacci retracement level of the last upside move from the $6,787 low to $7,409 high. More importantly, the price is now trading below the $7,000 level and the 100 simple moving average (2-hours).

If sellers succeed in pushing the price below $6,930 and the 76.4% Fibonacci retracement level of the last upside move from the $6,787 low to $7,409 high, there could be more losses.

On the downside, the next major support is near $6,860, which was a resistance earlier. Below this, the price may perhaps trade towards the $6,787 low in the near term. Should buyers fail to defend the $6,787 low, the next stop for BTC/USD could be near the $6,640 level (the 1.236 Fib extension level of the last upside move).

Overall, the recent drop indicates a short-term change in trend to bearish below $7,100. To bounce back, bitcoin price has to move back above the $7,100 level and the 100 simple moving average (2-hours).

Also, read: Bitcoin’s Only Way is Up: 4 News Talking a Big Game for Intensifying Crypto Adoption