Bitcoin Retreats: Key Resistance Halts Upside Momentum
Bitcoin is currently undergoing a price correction, pulling back from recent gains. Analysts indicate that staying below the $114,200 resistance level could lead to further downward movement, putting earlier advances in jeopardy.
The Recent Surge and Subsequent Correction
Bitcoin recently experienced a notable uptrend, pushing past the $113,500 mark and even momentarily touching above $116,200 before encountering significant selling pressure. This rally culminated in a high of $116,309. However, the cryptocurrency has since entered a corrective phase, slipping below the $114,200 support zone. This downturn saw the price breaching a bullish trend line with support at $114,050 and trading beneath the 100-hourly Simple Moving Average. Notably, the correction has also driven BTC below the 23.6% Fibonacci retracement level of its recent ascent from the $106,718 swing low to the $116,309 high.
Navigating Resistance and Support Levels
Immediate overhead resistance for Bitcoin is identified near the $113,650 level, with the crucial first major resistance residing at $114,200. A decisive close above $115,000 could reignite upward momentum, potentially pushing the price towards $116,200, and eventually targeting the $117,500 and $118,000 barriers. Conversely, failure to overcome the $114,200 resistance could prolong the downward trend. Key support levels to watch are $112,000, followed by the significant $111,500 mark, which aligns with the 50% Fibonacci retracement of the previous upward swing. Further losses could see the price testing $110,500 and eventually the main support at $108,500.
Technical Indicators Signal Caution
Technical analysis currently reveals a cautious sentiment in the short term. The Hourly MACD (Moving Average Convergence Divergence) is showing momentum gaining pace in the bearish zone. Concurrently, the Hourly Relative Strength Index (RSI) for the BTC/USD pair is positioned below the 50 level, reinforcing the correctional phase and indicating that sellers currently have the upper hand. Traders should closely monitor these indicators for potential shifts in market direction.
