Why Bitcoin Needs To Clear $42,500 For Hopes of a Fresh Rally
Bitcoin found support near the $41,200 zone against the US Dollar. BTC must clear $42,500 to start a recovery wave in the near term.
Bitcoin extended decline and tested the $41,200 support zone.
The price is still trading below $42,500 and the 100 hourly simple moving average.
There is a major bearish trend line forming with resistance near $42,450 on the hourly chart of the BTC/USD pair (data feed from Kraken).
The pair could start a decent recovery if there is a clear move above the $42,500 resistance.
Bitcoin Price Faces Hurdles
Bitcoin price struggled to start a decent recovery wave and extended decline below $42,000. BTC even broke the $41,500 support level and settled below the 100 hourly simple moving average.
A low was formed near $41,159 and the price is now correcting higher. There was a move above the $41,800 resistance zone. The price climbed above the 23.6% Fib retracement level of the main decline from the $43,800 swing high to $41,159 low.
On the upside, an initial resistance is near the $42,400 level and the 100 hourly simple moving average. Besides, there is a major bearish trend line forming with resistance near $42,450 on the hourly chart of the BTC/USD pair.
The trend line is close to the 50% Fib retracement level of the main decline from the $43,800 swing high to $41,159 low. An upside break above the trend line resistance could start a steady recovery wave above $42,500.
Source: BTCUSD on TradingView.com
The next key resistance is near the $43,000 level, above which the bulls might aim a test of $43,500. Any more gains may perhaps call for a test of the $44,500 resistance zone.
Fresh Drop in BTC?
If bitcoin fails to start a fresh increase above $42,500, it could start a fresh decline. An immediate support on the downside is near the $41,600 zone.
The first major support is seen near the $41,200 zone. A downside break below the $41,200 support zone may perhaps spark another major decline. The next major support is near $40,500, below which the price could even decline below the $40,000 zone.
Technical indicators:
Hourly MACD – The MACD is slowly gaining pace in the bullish zone.
Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is above the 50 level.
Major Support Levels – $41,600, followed by $41,200.
Major Resistance Levels – $42,400, $42,500 and $43,500.
