Bitcoin price embraces support at $11,400 following a rejection from levels slightly above $11,500.
BTC/USD is likely to dive back to $11,000 in a bid to gather the strength for the much-awaited breakout to $12,000.
Bitcoin price is hovering below $11,500 following another failed attempt at sustaining gains above $11,500. However, it is impressive that the largest cryptocurrency is holding above $11,400 following the recent slump that tested $11,100.
BTC/USD immediate upside is limited by the 50 Fibonacci retracement level taken between the last swing high of $12,488 to a swing low of $10,542. Also standing in the way of movement is a descending trendline resistance.
The trendline has continued to control the narrowing of Bitcoin’s value since the high formed at $12,488 (2020 high). The lock-step trading has forced in a lower high and lower low pattern, suggesting that Bitcoin may have broken its upward momentum for a consistent downward trend.
From the technical levels observed in the 4-hour range, the prevailing sideways trading is likely to last longer. The Relative Strength Index confirms the consolidation narrative with its leveling motion at 44.56. This follows a recovery from levels around 30 (reminiscent of the drop to $11,100).
As long as the RSI hovers at this current level, BTC consolidation will take precedence. However, it is important to watch the direction of the indicator as a break above 50 would signal increasing bullish grip and growing potential for gains towards $12,000.
The Moving Average Convergence Divergence (MACD) is stuck in the negative region, confirming that sideways trading would last longer. The same indicator can help highlight the direction Bitcoin would take after the sideways trading. For now, holding above $11,400 support, remains key to Bitcoin bulls because it allows them to gather strength before they stage another attempt at breaking the $12,000 resistance.
Luke has had a long interest in financial technology, especially cryptocurrency and blockchain. With a Bachelors degree in Journalism and Media, Luke is dedicating his writing skills for the digital currency sphere.He can be contacted at firstname.lastname@example.org