TA: Bitcoin Surges 5%, Why Pullbacks Remain Attractive To The Bulls

Bitcoin price started a strong increase after it broke the $16,000 resistance against the US Dollar. BTC is up 5% and it is now facing hurdles near $16,500.

• Bitcoin managed to clear the $16,000 resistance to start another increase.
• The price is currently trading well above the $16,200 support and the 100 hourly simple moving average.
• There are two bullish trend lines forming with support near $16,080 and $15,900 on the hourly chart of the BTC/USD pair (data feed from Kraken).
• The pair could correct a few points, but dips are likely to be limited below $16,000.

Bitcoin Price Settles Above $16K

Yesterday, we discussed the significance of an upside break in bitcoin price above the $16,000 resistance. BTC did gain strength and was able to clear the $16,000 resistance level.

The price even broke the $16,200 resistance and settled well above the 100 hourly simple moving average. It traded close to the $16,500 resistance and a new multi-month high was formed near $16,487. The price is currently consolidating gains near the $16,350 level.

An initial support is near the $13,650 level. It is close to the 23.6% Fib retracement level of the recent upward move from the $15,895 swing low to $16,487 high.

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The first major support on the downside is near the $16,200 level. The 50% Fib retracement level of the recent upward move from the $15,895 swing low to $16,487 high is also near the $16,195 level. Moreover, there are two bullish trend lines forming with support near $16,080 and $15,900 on the hourly chart of the BTC/USD pair. On the upside, the $16,500 level is a strong resistance. A successful break above the $16,500 resistance might open the doors for a push towards the $16,800 level in the near term.

Dips Remain Supported in BTC?

If bitcoin starts a downside correction, the $16,200 support zone might act as a decent support. The next major support is near the $16,000 level (the recent breakout zone). A downside break below the $16,000 support and both bullish trend lines might accelerate losses in bitcoin and it could decline towards the $15,500 support level. Technical indicators: Hourly MACD – The MACD is slowly losing momentum in the bullish zone. Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is currently correcting lower from the 70 level. Major Support Levels – $16,200, followed by $16,000. Major Resistance Levels – $16,500, $16,800 and $16,850.