Bitcoin price is showing signs of a downside correction below the $7,250 resistance area. BTC/USD could decline towards $7,100 or even $6,940 before a fresh rise.
This past week, we saw a decent rise in the bitcoin price above the $6,980 resistance. BTC/USD traded as high as $7,309 before it started a downside correction.
Looking at the 1-hour chart, the price corrected below the $7,120 level and traded as low as $7,060. The price recovered from the $7,060 low and traded above the $7,180 level, plus the 25 SMA (1-hour, orange).
Moreover, there was a break above the 50% Fib retracement level of the recent correction from the $7,309 high to the $7,060 low. On the upside, the bulls are facing hurdles near the $7,240 level and a connecting trend line.
The 61.8% Fib retracement level of the recent correction from the $7,309 high to the $7,060 low is also acting as a resistance. If there is a clear break above the $7,240 and $7,250 levels, the price is likely to continue higher towards $7,310 and $7,440.
At the outset, the bitcoin price is following an ascending channel with support near $7,100 on the same chart. If there is a downside break below the channel support, the price might extend its correction below the $7,060 low.
The next major support is near the $6,940 level (the previous breakout zone), where Bitcoin bulls are likely to take a stand. Once the current correction wave is complete near $7,100 or the $6,940 region, the price could bounce back and attempt a fresh increase above the $7,309 high in the near term.