Bitcoin Forms Bullish Pattern, Why BTC Could Climb Above $58K

Bitcoin price started a fresh increase after a drop towards $53,000 against the US Dollar. BTC is now forming an inverse head and shoulders, with chances of a break above $58,000.

• Bitcoin is showing positive signs above the $55,000 support zone.
• The price is now facing resistance near $58,000 and the 100 hourly simple moving average.
• There is a key bearish trend line forming with resistance near $58,000 on the hourly chart of the BTC/USD pair (data feed from Kraken).
• The pair is likely setting up for an upside break above the $58,000 resistance.

Bitcoin Price is Recovering

After a sharp decline, bitcoin found support above the $53,000 level. BTC traded as low as $53,222 and recently started a fresh increase. It cleared the $54,200 and $55,000 resistance levels.

There was a recovery above the 23.6% Fib retracement level of the downward move from the $61,695 high to $53,220 low. The price even climbed above the $56,000 level. However, the price is facing resistance near $58,000 and the 100 hourly simple moving average.

It seems like there is a possible inverse head and shoulders pattern forming with resistance near the $57,000 level. There is also a key bearish trend line forming with resistance near $58,000 on the hourly chart of the BTC/USD pair.

Source: BTCUSD on TradingView.com

The trend line is close to the 50% Fib retracement level of the downward move from the $61,695 high to $53,220 low. A successful break above the trend line resistance could open the doors for a decent increase towards the $58,800 and $60,000 levels.

Fresh Dip in BTC?

If bitcoin fails to correct higher above the $57,000 and $58,000 resistance levels, it could start a fresh decline. The first key support on the downside is near the $55,000 level.

The next key support is near the $54,200 level. If there is a clear break below the $54,200 level, the price is likely to continue lower in the coming sessions. The next major support is near $53,200, below which the bears might aim a test of the $50,000 support level.

Technical indicators:

Hourly MACD – The MACD is slowly gaining momentum in the bullish zone.

Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is struggling to stay above the 50 level.

Major Support Levels – $55,000, followed by $54,200.

Major Resistance Levels – $57,000, $57,500 and $58,000.