Bitcoin Price Analysis: BTC/USD’s Medium Term Outlook and Key Supports

Important points

• Bitcoin price traded lower recently and tested an important support near $6,100-6,120.
• BTC/USD is holding a significant bullish trend line with support at $6,140 on the daily chart.
• BTC price could recover in the short term if it stays above $6,120.

Bitcoin price analysis

This past week, there was a sharp reversal in bitcoin price from the $7,412 swing high. BTC/USD dropped heavily and broke the $6,700 and $6,420 support levels to move into a negative zone.

The daily chart  of BTC/USD indicates that the price declined below key supports and settled below the $6,420 support plus the 50-day simple moving average.

However, bitcoin buyers managed to hold losses near a significant bullish trend line with current support at $6,140 on the same chart. The trend line is clearly crucial since there was no close below it and the price formed a low of $6,123.

At the moment, the price is consolidating above the trend line and $6,150. An initial resistance is the 23.6% Fibonacci retracement level of the last significant decline from the $7,412 high to $6,123 low.

The last two daily candles are positive above $6,200, but they both are indicating a lack in the bullish momentum. BTC buyers need to gain traction above the $6,420 resistance to take the price higher. The next major hurdle is close to the $6,770 level and the 50% Fibonacci retracement level of the last significant decline from the $7,412 high to $6,123 low.

Above $6,770, the 50-day SMA and a connecting bearish trend line are positioned at $7,000. Therefore, in the medium term, the price has to clear the $7,000 barrier to move into a bullish zone.

On the flip side, if the bitcoin price fails to stay above the bullish trend line and $6,120, then the last line of defense is $5,800. Should there be a break below $5,800, the price could drop significantly towards $5,000 in the near term.

Also, read: Bitcoin, Ethereum, Ripple Price Analysis for the Week August 27 to September 02