Bitcoin Consolidating Gains, Why Close Below $17.5K Could Be Significant

Bitcoin price rose to the $ 18,500 level before correcting against the US dollar. BTC will have to stay above $ 17,500 for the short term to continue the upward move.

  • Bitcoin continued to rebound towards $ 18,500 before correcting sharply down.
  • The price holds key support at $ 17,500 and is well above the 100-hour simple moving average.
  • A large contraction triangle is forming on the hourly chart of the BTC / USD pair (data feed from Kraken) with resistance near USD 18,020.
  • The pair could start a new rally if there is a reasonable closing price above $ 18,000 and $ 18,200.

Bitcoin Price Holding Key supported

Yesterday there was a sharp rise in Bitcoin price above the resistance level of $ 17,500. BTC rose over 10% and even passed the $ 18,000 level. The price hit a new multi-month high near $ 18,500 before falling sharply.

The price plummeted above $ 1,000, breaking the $ 17,800 support. There was also an increase below the $ 17,500 support, but there was no close below it. The recent swing low was made near $ 17,299 and the high was made near $ 18,107.

The price now consolidates profits below $ 18,000. A large contraction triangle is also forming on the hourly chart of the BTC / USD pair with resistance near USD 18,020. The pair is testing the 23.6% fib retracement level of the recent wave from a low of $ 17,299 to a high of $ 18,107.

Source: BTCUSD on TradingView.com

The first major support appears to be forming near the $ 17,700 level and the lower trendline of the triangle. It is close to the 50% Fib retracement level of the recent wave from the $ 17,299 swing low to the $ 18,107 high.

If there is a downside break below the triangle support, the price could test the $ 17,500 support. A decent close below the $ 17,500 support could trigger a sharp decline in the days ahead.

New rally in BTC?

If Bitcoin removes the triangular resistance and then swings high the $ 18,107, it could go up again. The next immediate hurdle is near the $ 18,200 level.

A proper follow-through move above the $ 18,200 level should open the doors to a larger move higher. The next major resistance is at $ 18,500 and $ 18,880.

Technical indicators:

Hourly MACD – The MACD is slowly losing momentum in the bearish zone.

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

Major Support Levels – $ 17,700, followed by $ 17,500.

Main Resistance Levels – $ 18,020, $ 18,200, and $ 18,500.

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