This past week, bitcoin started a strong surge above the $14,500 and $15,000 resistance levels against the US Dollar. The BTC/USD pair even rallied above $15,500 and settled well above the 100 simple moving average (4-hours).
It traded close to the $16,000 level and formed a new multi-month high at $15,971 before starting a sharp downside correction. There was a break below the $15,500 support level.
Bitcoin price declined below the 50% Fib retracement level of the upward move from the $13,558 swing low to $15,971 high. However, the bulls were able to defend the $14,500 support zone and the price remained well above the 100 simple moving average (4-hours).
It also stayed above the 61.8% Fib retracement level of the upward move from the $13,558 swing low to $15,971 high. It seems like there is a major contracting triangle forming with resistance near $15,250 on the 4-hours chart of the BTC/USD pair.
To start a fresh rally, the price must break the triangle resistance zone and the $15,300 level. The next major resistance is near $15,500, above which the bulls are likely to aim a test of $16,000.
Downsides Could Be Limited in BTC
If bitcoin fails to clear triangle resistance, it could correct lower below $14,800. The first major support is near the triangle lower trend line and $14,500.
A clear break below the triangle support could lead the price towards the $14,000 support zone. The next major support is near the $13,750 level or the 100 simple moving average (4-hours).
4 hours MACD – The MACD for BTC/USD is slowly losing pace in the bearish zone.
4 hours RSI (Relative Strength Index) – The RSI for BTC/USD is back above the 50 level.