Bitcoin price jumps 5%, why recent breakout seems significant

Bitcoin price traded to a new weekly low before reversing losses against the US dollar. BTC broke $19,500 and may rise further towards $20,500.

• Bitcoin is up nearly 5% and there was a clear move above the $19,500 resistance zone.
• The price is trading below above $19,500 and the 100 hourly simple moving average.
• There was a break above a major bearish trend line with resistance near $19,150 on the hourly chart of the BTC/USD pair (data feed from Kraken).
• The pair is showing bullish signs and could extend gains above $20,000.

Bitcoin price starts new rally

Bitcoin price extended losses below the $19,000 support zone. Yesterday the US CPI data was released, which showed an increase of 8.2%. It pushed the BTC price below the $18,500 support zone.

The bears strengthened and the price plunged to the $18,200 support zone. However, the bears were unable to push the price further down. A low was formed near $18,142 and there was a strong bullish reaction. The price gained bullish momentum and climbed above the $19,000 level.

Bitcoin price cleared the 50% Fib retracement level on the downside move from the $20,443 high to the $18,142 low. Also, there was a break above a major bearish trend line with resistance near $19,150 on the hourly chart of the BTC/USD pair.

The price is now trading below over $19,500 and the 100 hourly simple moving average. It is trading near the 76.4% Fib retracement level for the downward move from the $20,443 swing high to the $18,142 low.

Source: BTCUSD on TradingView.com

On the upside, an immediate resistance is near the $20,000 level. A clear move above the $20,000 resistance could pump the price up further. The next major resistance is near the $20,450 level. Any further gains could start a steady rise towards the $21,200 resistance zone.

Dips supported in BTC?

If bitcoin fails to rise above the $20,000 resistance zone, it could start a downside correction. An immediate support on the downside is near the $19,500 zone.

The next major support is near the $19,200 zone and the 100 hour SMA. A downside break below the $19,200 support zone could increase selling pressure. In the indicated case, the price may decline towards the $18,500 support zone.

Technical indicators:

Hourly MACD – MACD is now picking up speed in the bullish zone.

Hourly RSI (Relative Strength Index) – RSI for BTC/USD is now in the overbought zone.

Major support levels – $19,500, followed by $19,200.

Major resistance levels – $20,000, $20,450 and $21,200.