In the past few sections, bitcoin started a strong rally from the $7,028 low against the USD. Moreover, it gained bullish momentum and broke the key $7,200 resistance level. This paved way for a decent uptrend above the $7,400 resistance and the 100 SMA (4-hours).

Additionally, the price climbed above the $7,500 resistance and traded to a new weekly high at $7,788. However, it recently made a downside correction below the $7,600 level. It traded below the 23.6% Fib retracement level of the recent uptrend from the $7,028 low to $7,788 high.

The 50% Fib retracement level of the recent uptrend from the $7,028 low to $7,788 high is also near $7,408 and acting as a strong support. It appears the price is currently consolidating above the $7,400 support. Notably, there is a short term contracting triangle forming on the BTC/USD 4-hours chart, with resistance near $7,625.

On the upside, if the price manages to break above the $7,625 and $7,650 resistance levels, it is likely to resume its uptrend. The first major resistance is near the $7,800 level, above which BTC could test the key $8,000 resistance area.

On the downside, if the BTC price fails to continue above the $7,650 resistance level, it could start a new correction. An initial key support is near the $7,400 level, where the bulls are likely to take a stance. Any further losses could perhaps lead the price towards the next key pivot at $7,200, or a connecting bullish trend line on the same chart.

Technical Indicators

The 4 hours MACD for the BTC/USD trading pair is slowly losing pace in the bullish zone. The 4 hours RSI (Relative Strength Index) for the pair is currently correcting lower from the 65 level. Major support level is seen near $7,400, whereas major resistance level is also seen near $7,800.