Bitcoin recovers sharply, why BTC can still struggle above $20,500

Bitcoin fell to the $18,500 support against the US Dollar. BTC recovered sharply, but bears remain active near $20,500 and $20,650.

  • Bitcoin climbed sharply after testing the $18,500 area.
  • Prices are now above $20,000 and close to the 100 hourly simple moving average.
  • A major bearish trend line has formed with resistance near $20,400 on the hourly chart of the BTC/USD pair (data feed from Kraken).
  • Barring a break above the $20,500 resistance, the pair is likely to start a fresh decline.

Bitcoin price rises to breakout

Bitcoin price starts drop again Below the $20,000 support area. The price even broke below the $19,200 support area and surged below $18,800.

There was a test of the $18,600 area with prices as low as $18,617. Recently, there has been a sharp rise in the price, with the price climbing above the $19,500 resistance. There was a move above the 50% Fib retracement level of the key decline from the $21,697 swing high to $18,617 low.

However, the price is now facing strong resistance near the $20,500 area, 100 hourly simple moving average. There is also a major bearish trend line forming with resistance near $20,400 on the hourly chart of the BTC/USD pair.

The trend line is near the 61.8% Fib retracement level of the key decline from the $21,697 swing high to $18,617 low. Immediate resistance on the upside is near $20,500.

Source: BTCUSD on TradingView.com

The next key resistance is near $20,950. A clear move above trendline resistance and then $20,950 could push prices higher. In the aforementioned case, the price could rise towards the $21,650 level. The next major resistance is near $22,500.

New drop for BTC?

If Bitcoin fails to break the $20,500 resistance zone, it could start another decline. Immediate support on the downside is near $20,000.

The next major support is now near $19,800, below which the price could fall sharply. In the aforementioned scenario, the price could drop towards the $18,500 level.

Technical indicators:

Hourly MACD – The MACD is now picking up pace in the bullish zone.

Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is now above the 50 level.

Major support levels – $20,000, then $19,800.

Major resistance levels – $20,500, $20,950 and $21,650.

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