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Can This Double Bottom Spark Bitcoin Rally Above $7,500?
Bitcoin is still struggling to clear the $7,400 and $7,500 resistances against the US Dollar. BTC price must stay above $7,080 to rally above $7,500. If not, it could decline heavily below $7,000.Bitcoin is trading in a contracting range below the $7,400 resistance against the US Dollar.A crucial breakdown support is forming near the $7,080 level.There is a major bearish trend line forming with resistance near $7,340 on the hourly chart of the BTC/USD pair (data feed from Kraken).It seems like there is likely a double bottom pattern forming near the $7,100 area.Bitcoin Nearing Key BreakoutIn the past few sessions, bitcoin price traded in a broad range below the $7,400 and $7,500 resistance levels against the US Dollar. BTC price declined recently below the $7,200 level, but losses were limited.The $7,080-$7,100 support area once again acted as a strong buy zone. More importantly, it seems like there is likely a double bottom pattern forming near the $7,100 area. A swing low is formed near $7,092 and the price climbed back above $7,300.The recent high was near $7,360 and the price is currently correcting lower below $7,300. There was a break below the 23.6% Fib retracement level of the recent wave from the $7,092 low to $7,360 high.Bitcoin is now testing the $7,220 area and the 100 hourly simple moving average. The 50% Fib retracement level of the recent wave from the $7,092 low to $7,360 high is also near the $7,226 level to act as a support.On the upside, the bulls are facing a strong resistance near the $7,400 level. There is also a major bearish trend line forming with resistance near $7,340 on the hourly Bitcoin PriceIf the highlighted double bottom pattern is valid, the price could break the trend line resistance and the $7,400 barrier. The main resistance is near the $7,500 level, above which the bulls are likely to aim $7,800 or $8,000.Key Breakdown SupportOn the downside, an initial support is near the $7,200 area. However, the key breakdown support for bitcoin is near the $7,080 level.If the bulls fail to protect the $7,080 support area, there is a risk of a downside break. The next support is near the $7,000 level, below which the bears are likely to aim a test of the $6,700 level.Technical indicators:Hourly MACD – The MACD is struggling to gain traction in the bullish zone.Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is slowly moving below the 50 level.Major Support Levels – $7,200 followed by $7,080.Major Resistance Levels – $7,340, $7,400 and $7,500.
Author: Aayush Jindal
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