TA: Bitcoin Corrects Lower, Why This Indicator Holds The Key

Bitcoin started a downside correction from the $57,800 zone against the US Dollar. BTC must stay above the 100 hourly SMA to start a fresh increase in the near term.

Bitcoin corrected lower below the $57,000 pivot level.

The price is now trading above $56,000 and the 100 hourly simple moving average.

There is a major bullish trend line forming with support near $55,200 on the hourly chart of the BTC/USD pair (data feed from Kraken).

The pair could start a fresh increase if it clears the $57,000 resistance zone.

Bitcoin price extended its increase above the $57,000 pivot level. BTC even broke the $57,500 level and settled above the 100 hourly simple moving average.

However, the price struggled to extend gains above the $58,000 level. It traded as high as $57,837 and recently corrected lower. There was a break below the $57,000 level. The price even spiked below the $56,000 level and the 100 hourly SMA.

Bitcoin found support near $54,019 and recently started an upward move. It climbed above the $55,000 level. There was a break above the 50% Fib retracement level of the recent decline from the $57,837 swing high to $54,019 low.

It is now trading above $56,000 and the 100 hourly simple moving average. There is also a major bullish trend line forming with support near $55,200 on the hourly chart of the BTC/USD pair.

On the upside, the bulls are facing resistance is near the $56,350 level. It is near the 61.8% Fib retracement level of the recent decline from the $57,837 swing high to $54,019 low. The first key resistance is near the $57,000 level and a connecting bearish trend line on the same chart.

A clear break above the $57,000 resistance could open the doors for a fresh increase. The next major resistance sits near the $58,000 level.

If bitcoin fails to clear the $57,000 resistance zone, it could again correct lower. An immediate support on the downside is near the $56,000 level.

The first major support is now forming near the $55,900 level and the 100 hourly SMA. A downside break below the 100 hourly SMA might push the price towards the $54,000 support zone in the near term.

Technical indicators:

Hourly MACD – The MACD is slowly gaining pace in the bullish zone.

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

Major Support Levels – $56,000, followed by $55,900.

Major Resistance Levels – $56,350, $57,000 and $58,000.