Bitcoin saw a 10% drop yesterday and broke down from its ascending support line.
Technical indicators give mixed readings. There is support at $53,500 and resistance at $56,500 and $60,000. The bitcoin (BTC) price dropped 10% yesterday and tested the $53,500 support level.
However, the cryptocurrency is still in a short-term uptrend, and future price action depends on the holding/losing the levels described below.
Bitcoin drops 10%
The bitcoin price has been increasing since reaching the local low of $47,000 on April 25. The alpha cryptocurrency is trying to break out from the long-term resistance near the psychological barrier of $60,000 (orange rectangle).
Yesterday’s price action pushed back to this level but was followed by a quick bounce and a sharp drop to the $53,500 area. BTC lost 10% of its value and found support in the 0.5 Fib retracement area of the last upward move.
Chart by Tradingview
Holding the $53,500 area is crucial to maintaining the bullish structure of the short-term uptrend. On the other hand, dropping below the support area at $56,500 creates a short-term resistance currently being re-tested.
Technical indicators
Daily technical indicators give mixed/bearish readings:
The Stochastic oscillator has made a bearish cross, dropping below 80 and is heading down.
In addition, the MACD generates lower positive momentum bars and is close to breaking into negative territory. RSI is in neutral territory, close to the value of 50.
Chart by Tradingview
Furthermore, the VPVR is in line with the monthly pivot and the aforementioned resistance area at $56,500. Regaining this area of the highest volume signature is crucial for determining the further direction of the trend.
Chart by Tradingview
Future BTC move
The cryptocurrency trader @AltcoinSherpa published a BTC chart that shows the key areas of resistance and support that are in line with our analysis. Their regaining or loss will be crucial for the next days of Bitcoin’s price action.
Source: Twitter
A closer look at the short-term four-hour chart reveals that bitcoin has broken down from the rising support line that has been respected since April 25.
The loss of this support line does not mean a reversal of the short-term bullish trend yet, as the price continues to hit higher lows (HL) and higher highs (HH). However, maintaining the key support area at $53,500 will determine the possibility of BTC for a potential attempt to break out from the resistance at $60,000.
Chart by Tradingview
Technical indicators on this interval are also mixed. RSI has dropped below the 50 line but is trying to rebound. MACD generates red bars, but sales pressure is declining. The Stochastic oscillator bounces just in front of bearish territory and tries to turn north.
Conclusion
BTC found support at $53,500 and is trying to regain an important area of resistance/support at $56,500. If it is successful, another attempt to break out from $60,000 will be possible.
