Bitcoin technical analysis update: BTC/USD breaks $7,000 but holds above critical support
|BTC/USD has taken another dip below the $7,000 level after it had suffered a flash crash to around $6,500 earlier in the day, a move related to a massive sell order on Bitcoin futures on the Chicago Mercantile Exchange (CME).
The current drop is more substantial and comes with additional volume and attention.
Nevertheless, it still seems like a correction. Bitcoin dropped to the 50% Fibonacci retracement of the move from $5,500 to nearly $8,400 at $6,900 and successfully bounced from that low. The 50% Fibonacci is a critical line separating a correction from a change of course and an outright downfall.
The Relative Strength Index on the daily chart shows that the granddaddy of cryptocurrencies has exited overbought conditions a few days ago and is now close to oversold conditions. Momentum remains to the downside but the digital coin holds above the 100-day and 200-day Simple Moving Average.
Support awaits at $6,600 (38.2% Fibonacci), then at $6,200 (23.6%) and finally at $5,850 (100 SMA).
Resistance is at $7,250 (61.8%), $7500 (initial post-rally high), and $7,600 (separator of ranges). The upside target is $8,388.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.