Bitcoin Price Analysis: BTC correction underway, holding onto 50-DMA is critical
- BTC/USD trades firmer but remains capped below $33K mark.
- A symmetrical triangle breakout on the daily chart keeps the bears hopeful.
- Critical 50-DMA support is the last resort for the BTC bulls.
Bitcoin (BTC/USD) has stalled its correction from the record highs of $41,987, as the bears take a breather before the next leg lower.
Markets resort to locking in gains after the parabolic rise, paving way for further downside correction. The digital asset lost almost 12% last week, with industry experts signaling further caution on a sustained move below the $30K round figure.
The retracement from all-time-highs gathered steam last week after the former Fed Chair and US Treasury Secretary nominee Janet Yellen said that cryptocurrency as an area of concern for terrorist and criminal financing.
Although, an announcement by BlackRock Inc. saved the day for the BTC bulls, driving the no.1 coin back above the $30K threshold. Wall Street's biggest money manager announced that it will now step into investing in bitcoin futures.
The company said in a filing with the Securities and Exchange Commission (SEC), "Bitcoin and bitcoin futures have generally exhibited significant price volatility relative to more traditional asset classes."
"Bitcoin futures may also experience significant price volatility as a result of the market fraud and manipulation," the US fund manager added.
BTC/USD: Not out of the woods yet
BTC/USD: Daily chart
Having confirmed a symmetrical triangle breakdown on the daily chart last Thursday, the risks remain skewed to the downside for the most favorite crypto coin, Bitcoin.
The price has entered a downside consolidation phase after the bulls managed to defend the critical upward-sloping 50-daily moving average (DMA) at $28,672.
A sharp sell-off could be triggered on a breach of the last, with a test of the 100-DMA support at $22,215 inevitable.
The 14-day Relative Strength Index (RSI), currently at 48.32, suggests that the upbeat momentum could likely be temporary and a good opportunity to sell at the higher levels.
On the flip side, the triangle support now resistance at $34,846 could cap any upside attempts.
The next powerful barrier awaits at $35,833, which is the horizontal 21-DMA. Further up, the pattern resistance at $36,496 could be brought into play.
BTC/USD: Additional levels to watch
Author
Dhwani Mehta
FXStreet
Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.
