Bitcoin Faces Stiff Resistance At $56,000, Massive Uptrend Is Likely

Today, Bitcoin dropped sharply to the $54,000 support after rejection from the $56,000 high. For the past three days, BTC price has been facing stiff resistance at the $56,000 high.

Sellers are defending the recent high as BTC price is compelled to a range-bound move below the resistance. The bears are attempting to push Bitcoin to the $50,000 psychological price level. If the bears succeed in pushing Bitcoin to the psychological support level, there is a tendency for further downside. 

Sellers will take the advantage of breaking the $50,000 support to sink the BTC price to the previous low at $48,000. However, if the $48,000 support collapses, the market will further decline to $43,000 or $41,000 low. This will cause Bitcoin to fall into a deeper correction. Conversely, if the BTC price retraces and finds support above $54,000, there is a likelihood of upside momentum. If the bulls clear the $56,000 resistance, a rally to $61,000 is possible.

Bitcoin indicator reading  

BTC price is attempting to break above the resistance line of the ascending channel. Bitcoin will resume upside momentum if the price breaks and closes above the support line. The downtrend will resume if price fails to break above the support line. Bitcoin is at level 47 of the Relative Strength Index period 14. It indicates that Bitcoin is in the downtrend zone and capable of falling.

Technical indicators:  

Major Resistance Levels – $65,000 and $70,000

Major Support Levels – $50,000 and $48,000

What is the next direction for BTC/USD?

Bitcoin is falling as the price retraces to the $54,000 support. The downtrend will resume if the $54,000 support is breached. Also, the Fibonacci tool analysis will hold if price breaks below the $48,000 support. On April 18 downtrend; a retraced candle body tested the 61.8% Fibonacci retracement level. The retracement implies that Bitcoin will decline to level 1.618 Fibonacci extension or the low of $41,627.10.  

Disclaimer. This analysis and forecast are the personal opinions of the author that are not a recommendation to buy or sell cryptocurrency and should not be viewed as an endorsement by CoinIdol. Readers should do their own research before investing funds.