Categories: Payment system news

TA: Bitcoin Drops To $54K, Why Recovery Could Be Limited In Short-Term

Bitcoin price extended its decline below the $55,500 support zone against the US Dollar. BTC is currently recovering, but it is likely to struggle near $55,500 and $56,450.

  • Bitcoin failed to clear $58,000 and it started a fresh decline below $57,000.
  • The price is now trading well below $56,450 and the 100 hourly simple moving average.
  • There was a break below a key contracting triangle with support near $56,800 on the hourly chart of the BTC/USD pair (data feed from Kraken).
  • The pair is likely to continue lower if it fails to recover above $55,500 and $56,450.

Bitcoin Price Extends Losses

There was no clear upside break in bitcoin above the $58,000 resistance zone. As a result, BTC broke the $56,450 support zone to move into a bearish zone (as discussed in yesterday’s analysis).

The bears took control and the price even failed to stay above the $55,500 support level. There was a break below a key contracting triangle with support near $56,800 on the hourly chart of the BTC/USD pair. There was also a spike below the $54,500 support and the price tested the $53,750 support.

A low is formed near $53,786, and the price is now trading well below $56,450 and the 100 hourly simple moving average. Bitcoin is currently recovering and trading above $54,500. It cleared the 23.6% Fib retracement level of the recent decline from the $58,400 high to $53,783 low.

Source: BTCUSD on TradingView.com

The first major resistance is near the $55,500 level. The next major resistance is near the $56,000 level. It is close to the 50% Fib retracement level of the recent decline from the $58,400 high to $53,783 low.

The main resistance is now forming near the $56,450 level, above which the price might revisit the key $58,000 breakout resistance zone.

More Losses in BTC?

If bitcoin fails to correct higher above $55,500 and $56,000, there are chances of more downsides in the near term. An initial support is near the $54,000 level.

The key support is now near the $53,750 level, below which the bears might aim a test of the $50,000 support zone in the near term.

Technical indicators:

Hourly MACD – The MACD is losing pace in the bearish zone.

Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is now below the 50 level.

Major Support Levels – $54,000, followed by $53,750.

Major Resistance Levels – $55,550, $56,000 and $56,450.

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