Bitcoin price started a downside correction from the $60,000 resistance against the US Dollar. BTC is now approaching a major support zone near $56,200 and $56,000.

• Bitcoin formed a short-term top near $60,000 and started a downside correction.
• The price is now trading near the $57,000 support and the 100 hourly simple moving average.
• There is a key rising channel forming with support near $56,150 on the hourly chart of the BTC/USD pair (data feed from Kraken).
• The pair is likely to continue higher as long as there is no downside break below the $56,000 support.

Bitcoin Price is Losing Momentum

There was an upside extension in bitcoin above the $59,500 level. BTC even climbed towards the $60,000 level before the bears took a stand. A high is formed near $60,040 before there was a dip.

There was a break below the $58,500 and $58,000 support levels. The price dipped below the 23.6% Fib retracement level of the upward move from the $53,761 swing low to $60,040 high. It is now trading near the $57,000 support and the 100 hourly simple moving average.

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The bulls are defending the 50% Fib retracement level of the upward move from the $53,761 swing low to $60,040 high. There is also a key rising channel forming with support near $56,150 on the hourly chart of the BTC/USD pair. If there is a downside break below the $56,200 and $56,000 support levels, there is a risk of a sharp decline. In the stated case, the price is likely to dive towards the $53,500 level in the near term. An intermediate support could be near the $55,000 level.

Fresh Increase in BTC?

If bitcoin stays above the $56,200 and $56,000 support levels, it could start a fresh increase. An initial resistance on the upside is near the $58,500 level. A clear break above the $58,500 level may possibly push the price towards the $60,000 resistance zone. Any more gains is likely to set the tone for a move towards the $61,500 level or even a new all-time high in the coming days. Technical indicators: Hourly MACD – The MACD is now gaining momentum in the bearish zone. Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is now below the 50 level. Major Support Levels – $57,000, followed by $56,000. Major Resistance Levels – $58,500, $60,000 and $61,500.