Bitcoin price analysis: BTC/USD bulls fall in the bear trap as the price plummets massively

Bitcoin ballistic rise in the last three days did not come as a surprise to many in the cryptocurrency industries. In fact, many expected that the bullish surge that started in the first week of April will touch $10,000 before we encounter any significant retracement. Indeed, there was a break above several critical levels at $6,000, $7,000 and $8,000. In fact, Bitcoin corrected close to $8,400 but formed a high at $8,370.2528.

The trading in the last couple of days saw Bitcoin consolidate above $7,500 while the upside was limited at $8,400. The price had also been pivotal at $8,000 prior to the devastating drop on the last day of the week (Friday). Bitcoin massive drop could not find support at the 61.8% Fib level taken between the last swing high of $8,370.25 and a swing low of $5,000. In fact, the grip by the bears sent the price in a spiral below the 50% Fib level before it found support at $6,500.

Although we have seen Bitcoin recover to levels above $7,000, the trend is strongly inclined to the downside. BTC/USD is trading at $7,260 following declines of 7.89% on the day. The declines are not only unique to Bitcoin as they have also affected other major assets in equal measures.

Looking at the chart, Bitcoin is likely to continue making losses in the coming sessions. The Relative Strength Index (RSI) is trending lower towards the overbought while the Moving Average Divergence Convergence (MACD) is heading lower and could hit the negative region soon. As far support is concerned the 100 Simple Moving Average (SMA) will offer support slightly below $6,500 while the 200 Exponential Moving Average (EMA) will prevent declines just above $6,000 level.

BTC/USD 4-hour chart