Monday, August 31, 2020

Bitcoin Shows Signs of Reversal; But $12,000 Holds The Key For Strong Rally



Bitcoin price is showing reversal signs above the $11,550 resistance against the US Dollar. BTC must surpass the $12,000 resistance for a sustained upward move.


  • Bitcoin started a steady rise above the $11,500 and $11,550 resistance levels.

  • The price traded as high as $11,731 and it settled above the 100 hourly simple moving average.

  • There is a major ascending channel forming with support near $11,650 on the hourly chart of the BTC/USD pair (data feed from Kraken).

  • The pair is likely to accelerate higher if it clears the $11,800 and $12,000 resistance levels.

Bitcoin Price Recovering Steadily


After forming a support base above $11,400 and $11,200, bitcoin price started a fresh increase against the US Dollar. BTC broke the main $11,500 hurdle and the 100 hourly simple moving average to move into a positive zone.


It even surpassed the $11,650 level and traded as high as $11,731. The price is currently consolidating gains and trading near the $11,680 level. An initial support on the downside is near the $11,650 level. It is close to the 23.6% Fib retracement level of the recent upward move from the $11,400 low to $11,731 high.


Moreover, there is a major ascending channel forming with support near $11,650 on the hourly chart of the BTC/USD pair. If there is a downside break below the channel support, the price could test the $11,550 support zone.


Bitcoin


Bitcoin price trades above $11,650. Source: TradingView.com

The 50% Fib retracement level of the recent upward move from the $11,400 low to $11,731 high is also near the $11,568 level. On the upside, the price is facing a couple of short-term hurdles near the $11,800 level.


The main hurdle for the bulls is near the $12,000 level, above which the price is likely to start a strong rally. In the mentioned case, bitcoin is likely to hit the $12,500 level.


Downside Correction in BTC?


If bitcoin fails to continue higher above the $11,800 and $11,850 levels, there could be a short-term downside correction. The first key support is near the channel lower trend line near $11,650.


The main support is now forming near the $11,550 and $11,500 levels, below which the price is likely to resume its decline towards the $11,000 level.


Technical indicators:


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


Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is correcting lower towards the 50 level.


Major Support Levels – $11,650, followed by $11,550.


Major Resistance Levels – $11,800, $11,850 and $12,000.





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