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TA: Bitcoin Dives To $40K, Why Recovery Could Be Capped

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Cryptocoins News / NewsBTC 206 Views

Bitcoin price settled below $46,000 and declined heavily against the US Dollar. BTC even traded close to $40,000 before starting an upside correction.

  • Bitcoin is down over 10% and it broke the $45,000 and $43,000 support levels.
  • The price is now trading below $43,000 and the 100 hourly simple moving average.
  • There is a major bearish trend line forming with resistance near $43,100 on the hourly chart of the BTC/USD pair (data feed from Kraken).
  • The pair could resume its decline if it fails to recover above the $43,000 zone.
Bitcoin Price Corrects Losses

Bitcoin price failed to stay above the $46,000 support zone. As a result, there was a sharp decline in BTC below the $45,000 level (as discussed yesterday).

The price broke many support zones near $44,000 and $43,000 to enter a bearish zone. The decline gained below $42,000 and the price settled below the 100 hourly simple moving average. It traded close to $40,000 and a low was formed near $40,200.

Bitcoin is now correcting higher and it broke the $41,500 level. The price was able to surpass the 50% Fib retracement level of the recent drop from the $44,250 swing high to $40,200 low.

An immediate resistance on the upside is near the $43,000 level. The first major resistance sits near the $43,100 level. There is also a major bearish trend line forming with resistance near $43,100 on the hourly chart of the BTC/USD pair.

Source: BTCUSD on TradingView.com

The trend line is close to the 76.4% Fib retracement level of the recent drop from the $44,250 swing high to $40,200 low. To start a strong recovery, the price must clear the $43,100 resistance. The next major resistance is near the $44,000 zone, above which the price could revisit the $45,000 resistance.

More Losses In BTC?

If bitcoin fails to clear the $43,100 resistance zone, it could resume its decline. An immediate support on the downside is near the $42,200 level.

The next major support is near the $41,500 zone. A downside break below the $41,500 zone could trigger a fresh decline towards the $40,500 level or even $40,000.

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 still well below the 50 level.

Major Support Levels – $41,500, followed by $40,500.

Major Resistance Levels – $43,000, $43,100 and $44,000.


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