Bitcoin Dives Below $40K, Why Bulls Could Struggle In Near Term
Bitcoin started a strong decline from the $43,500 resistance against the US Dollar. BTC remains at a risk of more downsides below the $39,200 support.
Bitcoin started a major decline after it failed to clear the $43,500 resistance.
The price is still trading below $41,000 and the 100 hourly simple moving average.
There was a break below a major bullish trend line with support near $42,000 on the hourly chart of the BTC/USD pair (data feed from Kraken).
The pair could continue to move down if there is a break below the $39,200 support.
Bitcoin Price Declines Heavily
Bitcoin price gained pace for a move above the $42,500 level. However, BTC struggled to gain pace for a move above the $43,500 resistance zone.
A high was formed near $43,497 before the bears appeared. As a result, there was a fresh decline below the $42,000 support level and the 100 hourly simple moving average. Besides, there was a break below a major bullish trend line with support near $42,000 on the hourly chart of the BTC/USD pair.
There was a fresh decline below the $41,200 support zone. Bitcoin even declined below the $40,000 support zone. A low is formed near $39,261 and the price is now consolidating losses.
On the upside, an initial resistance is near the $40,250 level. It is near the 23.6% Fib retracement level of the recent decline from the $43,497 swing high to $39,261 low. The first major resistance is near the $40,500 level. An upside break above the $40,500 resistance could start a steady recovery wave towards $41,200.
Source: BTCUSD on TradingView.com
The next key resistance is near the $41,200 level, above which the bulls might aim a test of $42,500. Any more gains may perhaps call for a move towards the $43,500 resistance zone.
Fresh Drop in BTC?
If bitcoin fails to start a fresh increase above $40,500, it could start a fresh decline. An immediate support on the downside is near the $39,500 zone.
The first major support is seen near the $39,200 zone. A downside break below the $39,200 support zone may perhaps spark another major decline. The next major support is near $38,500, below which the price could even decline below the $38,000 zone.
Technical indicators:
Hourly MACD – The MACD is now gaining pace in the bearish zone.
Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is in the oversold zone.
Major Support Levels – $39,500, followed by $39,200.
Major Resistance Levels – $40,250, $40,500 and $41,200.
