TA: Bitcoin Price Corrects 5%, Why Bulls Are Still Comfortable

Bitcoin price formed a double top pattern near $19,500 and corrected lower against the US Dollar. BTC is now trading below $18,500 and it could test the $18,000 support or $17,600.

• Bitcoin failed again to clear the $19,500 resistance and started a sharp downside correction.
• The price declined sharply below the $19,000 level and the 100 hourly simple moving average.
• There was a break below a major bullish trend line with support near $19,000 on the hourly chart of the BTC/USD pair (data feed from Kraken).
• The pair is now approaching the $18,120 and $18,000 support levels.

Bitcoin Price Forms a Double Top

There was another attempt by bitcoin price to clear the $19,450 and $19,500 resistance levels, but it failed. A double top pattern was formed near the $19,500 level and there was a sharp decline in bitcoin price below the $19,000 support.

The price declined below many key supports near $19,000 and the 100 hourly simple moving average. There was also a break below a major bullish trend line with support near $19,000 on the hourly chart of the BTC/USD pair.

Bitcoin broke the last swing low at $18,656 and extended its decline below the $18,500 level. The bears pushed the price below the 1.236 Fib extension level of the upward move from the $18,656 swing low to $19,511 swing high.

It is now approaching the $18,100 support level. It is close to the 1.618 Fib extension level of the upward move from the $18,656 swing low to $19,511 swing high. If there are more downsides, the price could even break the $18,000 support level.

In the stated case, the price is likely to continue lower towards the $17,620 and $17,500 support levels in the coming sessions.

Recovery in BTC?

If bitcoin stays above the $18,100 and $18,000 support levels, there could be a fresh increase. An initial resistance is near the $18,500 level.

The first major resistance is forming near the $18,700 level and the 100 hourly simple moving average. The main resistance sits at $19,000, above which the price could rise towards the $19,500 resistance zone in the near term.

Technical indicators:

Hourly MACD – The MACD is now gaining momentum in the bearish zone.

Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is currently well below the 50 level and approaching 20.

Major Support Levels – $18,000, followed by $17,620.

Major Resistance Levels – $18,500, $18,700 and $19,000.

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