Bitcoin Just Signaled "Sell" And It's Vulnerable to a Massive Correction

Bitcoin failed to climb convincingly above $10,200 against the US Dollar. As a result, BTC declined heavily below $9,800 and it is now vulnerable for a bigger a correction.

  • Bitcoin price failed to clear the $10,200 and $10,300 resistance levels against the US Dollar.
  • There was a sharp decline below the $10,000 and $9,800 support levels.
  • Yesterday’s major bearish trend line acted as a strong hurdle near $10,200 on the hourly chart of the BTC/USD pair (data feed from Kraken).
  • The pair is currently consolidating losses and it might face sellers near $9,800 if it corrects higher.

Bitcoin Reversal Could Be a Game Changer

Yesterday, we discussed the importance of the $10,200 resistance area for bitcoin against the US Dollar. BTC price made two attempts to clear the $10,200 and $10,300 resistance levels.

However, the bulls failed to gain traction above $10,200. A swing high was formed near the $10,300 level and the price declined heavily below the $10,000 support area.

Moreover, yesterday’s major bearish trend line acted as a strong hurdle near $10,200 on the hourly chart of the BTC/USD pair. The pair fell more than 5% and traded below the $9,800 and $9,700 levels.

Bitcoin

Similarly, there was a strong decline in Ethereum below $270 and ripple dived below $0.2850. Bitcoin even spiked below the $9,500 support area and traded to a new weekly low at $9,344.

It is currently correcting higher above the $9,500 level, plus the 23.6% Fib retracement level of the recent decline from the $10,301 high to $9,344 low. On the upside, there are many important hurdles forming for the bulls, starting with the $9,750 level.

The first key resistance is near the $9,800 and $9,820 levels. Besides, the 50% Fib retracement level of the recent decline from the $10,301 high to $9,344 low is near $9,823 to act as a strong resistance.

Therefore, bitcoin price must clear the $9,820 resistance to make another attempt for a clear break above the $10,200 resistance.

More Losses?

If BTC fails to continue above the $9,800 and $9,820 resistance levels, there is a risk of more downsides. An initial support is near the $9,500 level.

A daily close below $9,500 might push bitcoin in a bearish zone. In the mentioned case, the bears are likely to aim a test of the $9,000 support area.

Technical indicators:

Hourly MACD – The MACD is now gaining strength in the bearish zone.

Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is now well below the 40 level.

Major Support Levels – $9,500 followed by $9,200.

Major Resistance Levels – $9,750, $9,800 and $10,000.

Aayush is a Senior Forex, Cryptocurrencies and Financial Market Strategist with a background in IT and financial markets. He specialises in market strategies and technical analysis, and has spent over a DECADE as a financial…

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