Bitcoin was unable to break the $42,500 resistance level against the US Dollar. BTC has been making gains, and may be able to find bids in the $40,000 area.
- Bitcoin began a downward correction at $42,500 resistance.
- The 100-hourly moving average is at the lower end of $41,500.
- A break was seen below a bullish trend line, with support close to $41,550 in the hourly chart for the BTC/USD pair. (Data feed from Kraken).
- The pair could start an increase, if there’s a clear move lower than the $40,000 support area.
Bitcoin price drops below support
The $42,500 resistance level was breached twice by Bitcoin. BTC reached a peak near $42,400 and began a downward correction.
Below the support levels of $42,000 and $41,500, the price fell below $42,000. The price traded even below the $41,200 support level and the 100-hourly simple moving average. On the hourly chart for the BTC/USD pair, it also broke below a bullish trend line that has support close to $41,550.
Now, the pair is testing the 50% Fib level of the upmove from $38,810 low to $42,370 high. The upside is that the price faces resistance at the $41,000 mark.
Source: BTCUSD from TradingView.com
Near the $41,200 level and the 100 hourly SMA could come the next significant resistance. The steady rise could be initiated by a successful break above $41,200. If this is the case, then the price may rise towards $42,000. In the short term, any further gains could push the price to the $42,500 mark.
What is the Downside to Bitcoin?
Bitcoin could move lower if it fails to break the $41,200 resistance level. The $40,500 area is a support zone for the downside.
It is located near $40,000, the next support level. The 61.8% Fib Retracement level is at the $40,000 mark of the upward swing from the $38,810 swing high to $42,370 low. A sharp fall could be initiated by a downside breakout below the $40,000 support level. This could lead to a decline in the price towards $38,500.
Technical indicators
Hourly MACD – The MACD is now gaining pace in the bearish zone.
Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is now below the 50 level.
Major Support Levels – $40,500, followed by $40,000.
Major Resistance Levels – $41,200, $41,500 and $42,500.