The leading cryptocurrency rallied yesterday but failed to break the $35k resistant point, allowing the bears to regain control and drag the price down towards the $33k region.
Yesterday, Bitcoin saw a decent increase in price, breaking past the $33,500 resistance and moving above the $34,500 level. However, the leading cryptocurrency failed to extend gains above the $35k level.
The BTC/USD pair formed a high near 34,676 before the price embarked on a fresh decline. It dropped below the $34,000 support level and settled below its 100 hourly simple moving average. This was followed by a break below a crucial bullish trend line, with support close to the $33,900 mark on the hourly chart of the BTC/USD pair.
Bitcoin’s price continued to decline and traded for as low as $32,675. The leading cryptocurrency is now correcting losses and is trading above $33k on most crypto exchanges. The BTC/USD pair is testing the 23.6% Fib retracement level.
The cryptocurrency has struggled to find direction in recent weeks as investors wait for the next market catalyst. Bitcoin is expected to react modestly to the US inflation data to be published later today.
Inflation figures have always had an impact on Bitcoin prices, with some analysts viewing it as an ideal hedge against inflation.
BTC price outlook
The BTC/USD 4-hour chart shows a cryptocurrency that is slowly recovering from recent losses. It is up by less than 1% over the past hour, and if it maintains its positive movement, the first major resistance at $33,500 will soon come into focus.
BTC/USD chart. Source: Coinalyze
The 50% Fib retracement level of the recent drop from the $34,676 high to $32,675 low is close to the $33,600 level. The main resistance is close to the $34,000 level. BTC needs to move above the $34k region to avoid more downsides in the short term.
However, if Bitcoin fails to recover above the $33,500 and $34,000 resistant points, then it risks experiencing a larger decline in the short term. The bulls will be forced to defend the support level close to $32,650. If the support level at $32,200 is breached, then Bitcoin’s price could drop below $30k for the first time in weeks.