Bitcoin Price Consolidation: A Dip or a Deeper Correction?

Bitcoin’s recent price action has traders wondering: is this a temporary consolidation, or the prelude to a more significant downturn? After failing to break the $120,000 resistance, BTC experienced a pullback, dipping below the $118,000 level and testing support around $116,200. This consolidation phase is characterized by a bearish trend line visible on the hourly chart (Kraken data), providing resistance near the $118,000 mark. The 100 hourly Simple Moving Average also sits above the current price, adding to the bearish sentiment.

Analyzing the Technicals:
While a bounce back above $117,000 briefly offered hope, Bitcoin remains below key resistance levels. The 50% Fibonacci retracement level of the recent downward move from $119,630 to $116,260 has been tested, but not definitively broken. Further resistance lies near the $118,400 (61.8% Fib level), $119,150, and ultimately, the crucial $120,000 mark. A decisive break above $119,150 could trigger a renewed rally, potentially targeting $120,500, $122,000, and even $123,200.

The Bearish Outlook:
Conversely, failure to overcome the $118,400 resistance would strengthen the bearish case. Support levels to watch include $116,200, $115,500, and a more significant support zone around $112,500. A break below the main support at $111,200 could signal a more substantial correction.

Technical Indicators:
The hourly MACD is currently in bearish territory, showing weakening bullish momentum. The hourly RSI is below 50, further reinforcing the bearish sentiment.

Summary:
Bitcoin’s current price action presents a critical juncture. While a bullish breakout above $119,150 remains possible, the technical indicators and price chart suggest a downside correction may be more likely in the short term. Traders should closely monitor the $118,400 and $116,200 levels for confirmation of either scenario.

Major Support Levels: $116,200, $115,500, $112,500, $111,200
Major Resistance Levels: $118,000, $119,150, $120,500