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TA: Bitcoin Extends Decline, Here’s Why BTC Remains At Risk Below $56K

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Bitcoin price extended its decline and tested the $53,000 zone against the US Dollar.Although BTC is correcting higher, it is encountering various hurdles between $55,000 and $56,000.

  • In short-term bearish scale, Bitcoin continued to decline, reaching $53,000.
  • The price is now trading well below the $56,000 level and the 100 hourly simple moving average.
  • There is a key bearish trend line forming with resistance near $55,200 on the hourly chart of the BTC/USD pair (data feed from Kraken).
  • The pair could correct upwards, but it will struggling not far from $56,000 and $56,500.

Bitcoin Price is Facing Hurdles

Bitcoin failed to recover above the $57,000 barrier and it extended its decline.The price of BTC traded below $54,000; it even dropped below $53,200.

The price fell below $53,000, and the price as low as $52,943.It is now correcting higher and trading above the $54,000 level. There was a break above the 23.6% Fib retracement level of the recent drop from the $59,040 swing high to $52,943 low.

It is now trading well below the $56,000 level and the 100 hourly simple moving average. There is also a key bearish trend line forming with resistance near $55,200 on the hourly chart of the BTC/USD pair.

Bitcoin Price

Source: BTCUSD on TradingView.com

If there is an upside break above the trend line resistance, it could correct higher towards the $55,500 resistance zone. The 50% Fib retracement level of the recent drop from the $59,040 swing high to $52,943 low is also near the $55,600 level.

The next key resistance is near the $56,000 level. A close above the $56,000 level might increase the chances of a steady increase above the 100 hourly simple moving average.

More Losses in BTC?

If bitcoin fails to clear the $55,500 resistance or $56,000, it could start a fresh decline. An initial support on the downside is near the $54,200 level.

The first key support is near the $53,400 level, below which the price might revisit the $52,943 low. Any more losses could open the doors for a drop towards the $52,000 support zone.

Technical indicators:

Hourly MACD – The MACD is struggling to gain pace in the bullish zone.

Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is recovering towards the 50 level.

Major Support Levels – $54,200, followed by $53,000.

Significant resistance levels are $55,500, $56,000 and $58,500.

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 5/5/2021

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