Why Bitcoin Must Close Above $40K For Trend Reversal
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Bitcoin is struggling to clear the $40,000 resistance zone against the US Dollar. BTC must settle above $40,000 to start a steady upward move.
- Bitcoin struggled to clear the $40,000 resistance zone and corrected lower.
- The price is trading below $39,000 and the 100 hourly simple moving average.
- There was a break below a short-term contracting triangle with support near $38,800 on the hourly chart of the BTC/USD pair (data feed from Kraken).
- The pair could start a major increase if there is a close above the $40,000 resistance zone.
Bitcoin Price Faces Key Resistance
Bitcoin price remained in a positive zone above the $38,00 pivot level. BTC even broke the $39,500 resistance level. The bulls made a couple of attempts to clear the $40,000 resistance zone, but they failed.
The recent swing high was formed near $39,888 before there was a downside correction. There was a move below the $39,000 and $38,800 support levels. Besides, there was a break below a short-term contracting triangle with support near $38,800 on the hourly chart of the BTC/USD pair.
The pair is now trading below $39,000 and the 100 hourly simple moving average. A low is formed near $37,028 and the price is consolidating losses.
On the upside, an immediate resistance is near the $38,200 level and the 100 hourly SMA. The next key resistance is near the $38,500 level. It is near the 50% Fib retracement level of the downward move from the $39,888 swing high to $37,028 low.
Source: BTCUSD on TradingView.com
The main resistance is now near the $38,800 level. It is close to the 61.8% Fib retracement level of the downward move from the $39,888 swing high to $37,028 low. A clear move above the $38,800 resistance could send the price further higher. In the stated case, it could even attempt a clear move above $40,000.
Dips Limited in BTC?
If bitcoin fails to clear the $38,800 resistance zone, it could start a downside correction. An immediate support on the downside is near the $37,200 zone.
The next major support is seen near the $36,400 level. If there is a downside break below the $36,400 support, the price might gain bearish momentum towards $35,000.
Technical indicators:
Hourly MACD – The MACD is now losing pace in the bearish zone.
Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is now below the 50 level.
Major Support Levels – $37,200, followed by $36,400.
Major Resistance Levels – $38,200, $38,800 and $40,000.
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