Yesterday, there was a crucial breakout in BTC price above $8,500 on the daily chart against the USD. Moreover, it extended gains above $9,000, but struggled to clear the main $9,200 and $9,300 resistance levels.

A new 2020 high was formed close to $9,186 before the price started a sharp downside correction. The $9,000 and $8,800 support levels were successfully broken. Besides, there was also a break below a major ascending channel with support near $8,830 on the BTC price hourly chart.

It paved way for more losses below the $8,800 support and the 100 hourly simple moving average. Bitcoin finally tested the key $8,500 support zone, where the bulls took a stand.

A low was formed close to $8,473 and the price is currently recovering. It traded above the 23.6% Fib retracement level of the recent decline from the $9,186 high to $8,473 low.

On the downside, the major support is close to the $8,500 level. A successful downside break below this level, could cause the price to extend its correction towards the $8,000 support level. Any further losses below $8,000 might trigger a short term downtrend.

If the price stays above the $8,500 support, it is likely to begin a fresh rally. The first major resistance is close to the $8,800 zone and the 100 hourly simple moving average.

Furthermore, the 50% Fib retracement level of the recent decline from the $9,186 high to $8,473 low is also close to the $8,830 level. Therefore, BTC must surpass the $8,880 region to revisit its uptrend towards $9,200 and $9,500 in the days ahead.

Technical indicators also suggest that the hourly MACD for BTC/USD is losing momentum in the bearish zone and turning bullish. Its hourly RSI (Relative Strength Index) is currently near 40 and struggling to rise towards 50. Major support levels are at $8,500 and $8,000, whereas major resistance levels are also at $8,800, $8,830 and $9,200.