Bitcoin Smashes $10K: Key Reasons Why BTC Could Correct Before Fresh Increase

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Bitcoin is up more than 5% and it broke the main $10,000 resistance against the US Dollar. BTC price could correct lower in the short term towards $9,950 before it starts a fresh increase.Bitcoin rallied recently and broke many key hurdles near $9,950 and $10,000 (as discussed yesterday).The price traded to a new weekly high at $10,371 and it is currently correcting lower.There is a key connecting bullish trend line forming with support near $9,740 on the hourly chart of the BTC/USD pair (data feed from Kraken).The pair is likely to find a strong support near the $9,950 level (the previous major hurdle­).Bitcoin Price Rallies 5%Yesterday, we discussed the chances of a larger rally in bitcoin price above $9,750 against the US Dollar. BTC did gain traction above the $9,750 resistance and rallied more than 5%.It broke many key hurdles near $9,950 and $10,000 to move into a positive zone. A new weekly high is formed near $10,371 and the price is now trading well above the 100 hourly simple moving average.Bitcoin is currently correcting lower from $10,371 and trading below $10,200. It broke the 23.6% Fib retracement level of the recent rally from the $9,378 low to $10,371 high. However, there are many supports on the downside, starting with $10,000.The first major support is near the $9,950 (the previous major resistance). The next support is near the $9,875 level or the 50% Fib retracement level of the recent rally from the $9,378 low to $10,371 high.There is also key connecting bullish trend line forming with support near $9,740 on the hourly chart of the BTC/USD pair. On the upside, the recent high near $10,371 is a short term resistance zone.Bitcoin PriceIf the bulls manage to clear the $10,371 high, it could easily test the $10,500 resistance zone. Any further gains could lead the price towards the $11,200 pivot level in the coming sessions.Key Breakout Zone Now SupportThe previous major hurdle near the $9,950 zone could act as a strong support for bitcoin. If the price continues to slide, the last line of defense might be $9,700.Any further losses might start a downside extension towards the $9,500 level or the 100 hourly simple moving average in the near term.Technical indicators:Hourly MACD – The MACD is currently moving nicely in the bullish zone.Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is currently correcting lower from the 85 level.Major Support Levels – $9,950 followed by $9,875.Major Resistance Levels – $10,375, $10,500 and $10,800.

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