Bitcoin’s price took another dive, testing the crucial $40,000 support zone. Although there is a current upward movement, the cryptocurrency needs to surpass the $42,350 resistance level to establish a positive trend. Currently, Bitcoin is trading below the 100 hourly Simple Moving Average, struggling to regain its momentum.
After plummeting below support levels at $43,500 and $43,200, Bitcoin even breached the $41,200 mark before witnessing a rebound. A new low formed around $39,999 mark, which the coin is now trying to surpass. It recently climbed higher, breaking the 23.6% Fibonacci retracement level of the downside move from the $44,699 swing high to the $39,999 low.
Resisting the Bearish Trend
A positive sign for Bitcoin is a break above a bearish trend line at around $41,300, as observed in the BTC/USD hourly chart. However, the coin is yet to exceed $43,600 and regain its position above the 100 hourly Simple Moving Average. The immediate hurdle that Bitcoin needs to overcome is near the $42,000 level, followed by a more significant resistance forming around $42,350. This resistance level coincides with the 50% Fibonacci retracement level of the downward move from the $44,699 swing high to the $39,999 low.
The Potential Upside
If Bitcoin manages to close above the $42,350 resistance level, it could pave the way for a steady increase in price. The next significant resistance level will be around $43,000, followed by a potential rise towards $44,000. Breaking above the $44,000 mark would set the stage for testing the psychologically important level of $45,000.
However, if the digital currency fails to surpass the $42,350 resistance zone, it may encounter another decline. In this scenario, immediate support on the downside is expected around $41,200. If this level is breached, Bitcoin may test the $40,550 level, and if that fails as well, the price might fall back towards the crucial $40,000 zone. Trading below $40,000 exposes the possibility of a sharp and substantial decline, potentially targeting the $38,500 support level in the near future.
Examining the technical indicators, the hourly MACD (Moving Average Convergence Divergence) is currently gaining momentum in the bearish zone, indicating the prevailing downward pressure. Moreover, the RSI (Relative Strength Index) for BTC/USD is below the 30 level, suggesting that the cryptocurrency is approaching oversold territory.
Bitcoin’s recent struggles and volatility have tested its support levels at $40,000. While there are signs of a fresh increase, the cryptocurrency needs to break above the $42,350 resistance level to regain positive momentum. Failure to do so could result in another decline and the possibility of a sharp downturn. Traders and investors should closely monitor Bitcoin’s price action as it attempts to navigate through these critical levels.
Leave a Reply