Key Points

Bitcoin price extended downside correction and tested the key support at $6,775 against the US Dollar.

This week’s followed major bullish trend line was breached with support at $6,930 on the hourly chart of the BTC/USD pair (data feed from Kraken).

The pair bounced back sharply after testing $6,775 and it could revisit the recent high in the near term.

Bitcoin price decline was contained by $6,775 against the US Dollar. BTC/USD is still in a positive zone and it may soon climb back towards $7,120 and $7,200.

Bitcoin Price Analysis

Yesterday, we saw the start of a downside correction from the $7,130 swing high in bitcoin price against the US Dollar. The BTC/USD pair declined and broke the $6,920 and $6,920 support levels. There was even a spike below the $6,800 level and the 100 hourly simple moving average. Additionally, the price cleared the 50% Fib retracement level of the last upward move from the $6,710 low to $7,130 swing high.

More importantly, this week’s followed major bullish trend line was breached with support at $6,930 on the hourly chart of the BTC/USD pair. However, bitcoin buyers took a stand near the $6,775 support area, which was a resistance earlier. The price reacted very aggressively and bounced back above the $6,900 level. It even climbed back above the $6,920 level and the 100 hourly SMA. Buyers pushed the price above a bearish trend line and the $6,950 resistance. Lastly, there was a break above the 50% Fib retracement level of the recent slide from the $7,119 high to $6,778 low.

Looking at the chart, bitcoin recovered nicely from the $6,778 low and is currently trading with a bullish angle. It seems like the price may revisit the $7,130 high as long as the $6,775 support is intact. Above $7,130, the next resistances are $7,200 and $7,250.

Looking at the technical indicators:

Hourly MACD – The MACD for BTC/USD is placed nicely in the bullish zone.

Hourly RSI (Relative Strength Index) – The RSI is back above the 50 level.

Major Support Level – $6,850

Major Resistance Level – $7,130