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TA: Why Bitcoin Needs To Clear $42,500 For Hopes of a Fresh Rally

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Cryptocoins News / NewsBTC 252 Views

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.


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