Bitcoin extended the decline below the $40,000 support against the US Dollar. BTC is correcting losses but could face resistance near the $39,500 zone.
Bitcoin extended the decline below the $40,000 and $39,500 support levels. The price is trading below $40,000 and the 100 hourly simple moving average. There is a key bearish trend line forming with resistance near $39,500 on the hourly chart of the BTC/USD pair (data feed from Kraken). The pair could correct higher, but the upside could be limited above $40,000.
Bitcoin price remains in a downtrend
Bitcoin price failed to hold above the $42,000 support level and the decline was prolonged. BTC traded below the $41,200 support level to enter a bearish zone.
The decline gained pace below the $40,000 level and the 100 hourly simple moving average. The pair even broke the $39,500 support and traded as low as $38,000. It is now correcting losses and trading above the $38,800 level.
Bitcoin is now testing the 50% Fib retracement level of the recent drop from the $40,450 high to $38,000 low. On the upside, an initial resistance is near $29,300. The next key resistance is near the $39,500 level. There is also a key bearish trend line forming with resistance near $39,500 on the hourly chart of the BTC/USD pair.
The trend line is near the 61.8% Fibonacci retracement level of the recent drop from the $40,450 high to $38,000 low. Major resistance is now forming near the $40,000 level.
Source: BTCUSD on TradingView.com
A clear move above the $40,000 resistance zone could initiate a decent rally. The next major resistance is near $40,450 and the 100 hourly simple moving average, above which the price could rally towards the $41,200 level.
More losses in BTC?
If Bitcoin fails to start a recovery wave above the $39,500 resistance zone, it could continue moving lower. An immediate support on the downside is near the $38,500 zone.
The next big support is seen near the $38,000 level. If there is a downside break below the $38,000 support zone, the price could gain bearish momentum to move to $36,800.
Hourly MACD – The MACD is now losing pace in the bullish zone.
Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is just above the 50 level.
Major support levels: $38,500, followed by $38,000.
Major resistance levels: $39,500, $40,000 and $40,450.
This post Bitcoin Breaks $40K, Why Recovery Might Face Hurdles
was published first on https://www.newsbtc.com/analysis/btc/bitcoin-breaks-40k-bearish/