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.