The Bitcoin price is approaching a crucial resistance level that is likely to determine its future trend. While a breakout above it could take the price towards $8,000, a breakdown would likely cause a sharp drop towards $6,300.
The BTC price increased considerably on April 22. While it began the day at $6,818, it was trading at $7,100 at the time of writing. However, it faces an uphill climb in case it wants to continue moving upwards. Pierre_Crypt0 stated that the price is approaching an important resistance level, which is the final one that is likely to initiate a reversal. If not, the price could continue increasing towards new highs.
Let’s take a closer look at the BTC price and determine if it is likely to decrease or if it will continue moving upwards.
The Bitcoin price is trading in a range between $7,175 and $6,650 and has been doing so since April 3.
Throughout this period, the price has deviated twice above the resistance of the range, both of which were followed by a sharp drop. This is a bearish sign that suggests that the price will head lower.
As for the levels that are expected to provide resistance, the first one is found at $7,085, which is the 0.618 Fib level of the entire downward move. The stronger resistance level is found at $7,175, since it coincides with the resistance level of the range.
When looking at a higher time-frame, we can see another trading range, found between $6,900 and $5,700. At the time of writing, the price was trading slightly above this range.
In addition, there is a descending resistance line that the price has been following since reaching a high of $7,454 on April 7. The line has been validated thrice until now. At the time of writing, the descending resistance line was at $7,175. IT also coincides with a minor resistance area, which is also at $7,175.
Therefore, we can see the importance of the $7,175 level. All three of the following are converging right at this level:
- The descending resistance line.
- The minor resistance area.
- The 0.786 Fib level of the downward move.
If the price gets rejected, it is likely to fall back inside this $5,700-$6,900 range. If that were to occur, it could trigger a sharp drop towards the range EQ first and the support of the range afterwards.
To conclude, the Bitcoin price is approaching a significant resistance level at $7,175 that is likely to reverse the short-term upward trend. If the price gets rejected, it is likely to fall back towards $6,300, and possibly $5,700. On the other hand, a breakout above $7,200 would likely indicate that the price is still in a bull market and move towards new highs.