- Bitcoin price continued to move higher and settled above the $700 mark against the US dollar.
- Many traders are in disbelief that the price surged this high in a short span of time.
- I think BTC/USD is due for a correction now looking at the weekly chart (data feed from Bitstamp).
Bitcoin price surge was amazing, but BTC/USD is reaching a point where the bulls need to be very careful moving ahead.
Bitcoin Price Resistance
Bitcoin price this past week traded above the $750 mark against the US Dollar, and was simply unstoppable. The last 4 weekly candles on the weekly chart of BTC/USD (data feed from Bitstamp) tells the complete story. However, at the same time if we look at the history, there were no such back to back candles. So, BTC may find it very hard to continue trading higher.
The price is currently testing the 61.8% Fib retracement level of the last drop from the $1153 high to $145 low, which is acting as a resistance for more gains. No doubt, it is a technical level and if it continues to act as a resistance, the price might move down.
In my view, the price is due for a major correction, and the current rally should end sooner or later. I would suggest buyers not to get more aggressive, and do not risk a lot buying BTC/USD at these levels as it may turn down any time in the near term.
Looking at the technical indicators:
Weekly MACD – The MACD is in the bullish slope but along with a divergence, suggesting the strength of the recent move.
Weekly RSI (Relative Strength Index) – The RSI is well around the extreme overbought levels, which is a warning sign for the BTC buyers.
Major Support Level – $710
Major Resistance Level – $780
Charts from Bitstamp; hosted by Trading View