Bitcoin price plunged towards the $38,500 support zone. BTC is attempting a recovery and may have trouble breaking above the $40,500 resistance.
- Bitcoin price extended its decline and tested the $38,500 support zone.
- The price is trading below $40,000 and the 100-hour simple moving average.
- The hourly chart of the BTC/USD pair (data feed from Kraken) shows a major bearish trendline forming with resistance near $40,450.
- The pair may struggle to recover above the $40,000 and $40,500 resistance levels.
Bitcoin price turns red
Bitcoin price remained bearish below the $40,000 support zone. BTC continued its downward trend, trading below the $49,200 level. Finally, we tested the $38,500 support area as discussed in yesterday’s post.
A new weekly low was formed near $38,518 and the price is now correcting losses. It is slowly recovering beyond the $39,000 level. It cleared the 23.6% Fib retracement level of the downward move from the $42,260 swing high to the $38,518 low.
Bitcoin is currently trading below $40,000 and the 100-hour simple moving average. Immediate resistance is near the $40,000 level. The first major resistance is near the $40,350 level or the 50% Fib retracement level of the downside move from the $42,260 swing high to the $38,518 low.
Source: TradingView.com BTCUSD
The hourly chart of the BTC/USD pair also has a major bearish trendline forming with resistance near $40,450. A clear break above the $40,450 resistance level could lead the price to move towards the $40,850 resistance level. The next resistance is now forming near the $41,250 level. Prices could rise further above the $41,250 level. The next major resistance level is $42,000.
Another drop in BTC?
If Bitcoin fails to rise above the $40,450 resistance zone, another decline could begin. Immediate support for the downside is near the $39,400 level.
The next major support is $39,000. The price could gain bearish momentum if it closes below $39,000. If indicated, the price may find the support level of $38,500 again in the near future.
Technical indicators:
Hourly MACD – MACD is currently losing pace in bearish territory.
Hourly Relative Strength Index (RSI) – The RSI for BTC/USD is now above the 50 level.
Key support levels – $39,400, then $38,500.
Key resistance levels – $40,350, $40,450 and $40,850.
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