Bitcoin price gained nearly 5% and it tested the $12,500 resistance against the US Dollar. BTC is currently correcting gains, but technicals suggest more upsides above $12,500.

• Bitcoin broke the main $12,000 resistance area to start a strong upward move.
• The price traded close to the $12,500 resistance and it is currently correcting gains.
• There is a key bullish flag pattern forming with resistance near $12,380 on the hourly chart of the BTC/USD pair (data feed from Kraken).
• The pair could start a fresh rally if it clears the $12,380 and $12,400 resistance levels.

Bitcoin Price Breaks Key Resistance

Yesterday, we saw positive moves in bitcoin and discussed chances of an upside break above $12,000 against the US Dollar. BTC did gain momentum and surpassed the $11,850 resistance.

It opened the doors for an upside break above the $12,000 resistance level. The price broke the $12,200 resistance and settled well above the 100 hourly simple moving average. It traded close to the $12,500 resistance and it is currently correcting gains.

A new monthly high is formed near $12,479 and the price is now trading below $12,400. Bitcoin is testing the 23.6% Fib retracement level of the recent rally from the $11,785 swing low to $12,479 high.

Bitcoin price trades above $12,200. Source: 

It seems like there is a key bullish flag pattern forming with resistance near $12,380 on the hourly chart of the BTC/USD pair. The main support is now forming near the $12,120 level or the 50% Fib retracement level of the recent rally from the $11,785 swing low to $12,479 high. On the upside, the price could start a fresh rally if it clears the flag resistance and the $12,400 level. An immediate resistance is near the $12,500 level. A successful close above the $12,500 level might open the doors for a sharp rise towards the $13,000 level in the near term.

Dips Supported in BTC?

If bitcoin fails to clear the $12,400 resistance, there might be a downside correction. The first major hurdle for the bears is seen near the $12,100 level. The key support and a possible buy zone could be near the $12,000 level (the recent breakout zone), below which the price might decline towards the $11,900 level or the 100 hourly SMA. Technical indicators: Hourly MACD – The MACD is slowly losing pace in the bullish zone. Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is currently correcting lower towards the 50 level. Major Support Levels – $12,120, followed by $12,000. Major Resistance Levels – $12,380, $12,400 and $12,500.