Bitcoin has once again tested the crucial support level of $40,000, signaling a potential bearish trend. Despite a recent attempt at a recovery, the cryptocurrency must surpass the $42,350 mark to regain momentum and move into a positive zone. However, with its current trading position below $43,600 and the 100 hourly Simple Moving Average, there are challenges ahead.
After a significant drop below the $43,500 and $43,200 support levels, Bitcoin fell to as low as $39,999 before showing signs of a slight recovery. It has now climbed above the 23.6% Fibonacci retracement level of the downward move from its swing high of $44,699 to the low of $39,999. Additionally, a bearish trend line resistance near $41,300 was broken, indicating a possible reversal.
However, despite these positive developments, Bitcoin’s price remains below the 100 hourly Simple Moving Average and the $43,600 mark. The immediate resistance lies around the $42,000 level, followed by a more significant barrier near $42,350, which represents the 50% Fibonacci retracement level.
Should Bitcoin successfully break above the $42,350 resistance zone, it may embark on a steady increase. The next important resistance to overcome would be around $43,000, leading to a potential rise towards the $44,000 level. If the price manages to sustain above $44,000, it could pave the way for further gains and a test of $45,000.
Alternatively, if Bitcoin fails to surpass the $42,350 resistance, it could resume its downward trajectory. Immediate support is present near the $41,200 level, and a breach below that might push the price towards the $40,550 mark. A drop below $40,000 would greatly increase the risk of a sharp decline, potentially driving the price towards the $38,500 support level.
The hourly MACD (Moving Average Convergence Divergence) is currently indicating bearish momentum for Bitcoin, residing in the bearish zone. Furthermore, the Relative Strength Index (RSI) for BTC/USD is below the 30 level, suggesting oversold conditions.
Bitcoin remains bound by a crucial support level at $40,000, and its ability to surpass the $42,350 resistance will determine its short-term trajectory. While signs of recovery are visible, the cryptocurrency faces obstacles such as the 100 hourly Simple Moving Average and resistance levels at $42,000 and $42,350. Traders should closely monitor these key levels to better assess potential price movements and adapt their strategies accordingly.
