Bitcoin Price Analysis: BTC Testing Key Support But Can It Bounce Back?

In the past few sessions, there was a strong decline in bitcoin price below the $8,120 support. BTC to USD is now testing the main $7,880 support, which holds the key in the near term.

Key Takeaways: BTC/USD

• Bitcoin price is under pressure and is trading well below the $8,120 pivot against the US Dollar.
• BTC/USD is currently following a declining channel with resistance near $7,990 on the 2-hours chart (data feed from Bitstamp).
• Ethereum, ripple, and bitcoin cash are also facing an increase in selling pressure.

Bitcoin Price Analysis

After a failure to clear the $8,290-$8,300 resistance area, bitcoin price started a fresh decline. BTC broke the range support near the $8,160 level to enter a bearish zone. It opened the doors for more losses and the price broke the $8,120 pivot and support area.

Looking at the 2-hours chart, bitcoin even settled below the $8,120 level and the 50 simple moving average (2-hours, purple). The decline was such that the price tested the main $7,880 support area, where the bulls took a stand.

The price is currently correcting higher after trading as low as $7,887. On the upside, there is a strong resistance forming near $7,980, $7,990 and $8,000 levels. Moreover, the 23.6% Fib retracement level of the recent slide from $8,313 to $7,887 is near the $7,988 level.

More importantly, there is a declining channel forming with resistance near $7,990 on the same chart. Therefore, bitcoin price must climb above the $7,990 and $8,000 levels to start a fresh recovery.

On the upside, the next key resistance is near the $8,100 level and the 50 simple moving average (2-hours, purple). Additionally, the 50% Fib retracement level of the recent slide from $8,313 to $7,887 is near $8,100 to stop the recovery.

To move into a positive zone, the price has to climb above the $8,100 resistance and the $8,160 zone. If not, it is likely to continue lower below $7,900. The main support for bitcoin is near the $7,880 and $7,840 levels. A successful close below the $7,840 area might push the price further lower towards $7,620 and $7,600.