The BTC/USD pair gained bullish momentum at the beginning of this month above the $11,000 level. The BTC price even broke the $11,500 resistance and settled well above the 100-day simple moving average (SMA). Moreover, there was a break above the $12,000 level and the price recorded a new monthly high close to $12,100.
However, BTC failed to settle above the $12,000 level and recently started correcting lower. The correction wave was such that the $11,800 support level was broken. The BTC price traded below the 23.6% Fib retracement level of the key rally from the $9,000 swing low to $12,100 high. At press time, the price is trading close to the $11,300 level.
More importantly, there is also a crucial bullish trend line forming on the daily chart of the BTC/USD pair, with support close to $11,240. The daily MACD for the pair is slowly moving into the bearish zone. Its daily RSI (Relative Strength Index) is now correcting lower towards the 50 level.
On the downside, if the pair breaks the trend line support, there is a risk of an extended decline. The first major support is close to the $11,000. Meanwhile, the main support is near the $10,500 level or the 50% Fib retracement level of the key rally from the $9,000 swing low to $12,100 high.
Conversely, if the price stays above the trend line support or $11,200, it could resume its uptrend. On the upside, an initial resistance is close to the $11,500 level, above which the bulls could gain strength. The main resistance is still near the $12,000 barrier, above which the price is likely to start another strong rally in the coming sessions. In the mentioned bullish case, BTC could rise towards the $12,400 and $12,500 levels.