Bitcoin price was cut by over 20% against the US dollar yesterday. BTC is bouncing back from $ 30,000 and could attempt a bullish reversal above $ 40,000.
- Bitcoin fell below the USD 40,000 and USD 35,000 support levels.
- The price is now trading well below $ 42,000 and the 100-hour simple moving average.
- A key bearish trendline is forming on the hourly chart of the BTC / USD pair (data feed from Kraken) with resistance near USD 39,000.
- The pair is likely to start a strong uptrend when there is a break above $ 40,000.
Bitcoin price starts recovery
Bitcoin failed to surpass the support levels of $ 42,000 and $ 42,000. BTC fell over 20%, breaking many key supports near $ 35,000. There was also a surge below the $ 32,000 support zone.
A low has been formed near $ 29,750 and the price is now correcting higher. It broke the $ 35,000 resistance zone. There was also a break above the 50% fib retracement level of the recent decline from a swing high of $ 45,775 to a swing low of $ 29,750.
However, the price is trading well below $ 42,000 and the 100-hour simple moving average. Immediate resistance is near the $ 39,000 level.
A crucial bearish trendline is also forming on the hourly chart of the BTC / USD pair with resistance near USD 39,000. The trendline is close to the 61.8% Fib retracement level of the recent decline from the $ 45,775 swing high to the $ 29,750 swing low.
Source: BTCUSD on TradingView.com
A successful break above the trendline resistance could set the pace for a strong move above the USD 40,000 resistance. The next major resistance is near the $ 42,000 level. A closing price above the $ 42,000 level could set the pace for a strong rally in the coming sessions. The next major resistance is near the $ 46,000 level.
Fresh drop of BTC?
If Bitcoin fails to hit the $ 39,200 and $ 40,000 resistance levels, it risks falling again. Initial downside support is near the $ 36,000 level.
The first major support is now forming near the $ 34,000 zone. A downside break below the USD 34,000 support could in the short term trigger another drop towards the main USD 30,000 support area.
Hourly MACD – The MACD is now gaining pace in the bullish zone.
Hourly RSI (Relative Strength Index) – The RSI for BTC / USD is likely to cross the 50 level.
Major Support Levels – $ 36,000, followed by $ 34,000.
Main Resistance Levels – $ 39,000, $ 40,000, and $ 42,000.