Thursday 19 May 2022
Home / bitcoin / TA: Bitcoin Breaks $40K, Why Recovery Could Face Hurdles

TA: Bitcoin Breaks $40K, Why Recovery Could Face Hurdles

Bitcoin extended decline below the $40,000 support against the US Dollar. BTC is correcting losses, but it might face resistance near the $39,500 zone.

  • Bitcoin extended decline below the $40,000 and $39,500 support levels.
  • The price is trading below $40,000 and the 100 hourly simple moving average.
  • There is a key bearish trend line forming with resistance near $39,500 on the hourly chart of the BTC/USD pair (data feed from Kraken).
  • The pair could correct higher, but upsides might be limited above $40,000.

Bitcoin Price Remains In Downtrend

Bitcoin price failed to stay above the $42,000 support level and extended decline. BTC traded below the $41,200 support level to enter a bearish zone.

The decline gained pace below the $40,000 level and the 100 hourly simple moving average. The pair even broke the $39,500 support and traded as low as $38,000. It is now correcting losses and trading above the $38,800 level.

Bitcoin is now testing the 50% Fib retracement level of the recent decline from the $40,450 swing high to $38,000 low. On the upside, an initial resistance is near the $29,300. The next key resistance is near the $39,500 level. There is also a key bearish trend line forming with resistance near $39,500 on the hourly chart of the BTC/USD pair.

The trend line is close to the 61.8% Fib retracement level of the recent decline from the $40,450 swing high to $38,000 low. The main resistance is now forming near the $40,000 level.

Source: BTCUSD on TradingView.com

A clear move above the $40,000 resistance zone might start a decent increase. The next major resistance is near $40,450 and the 100 hourly simple moving average, above which the price might rise towards the $41,200 level.

More Losses in BTC?

If bitcoin fails to start a recovery wave above the $39,500 resistance zone, it could continue to move down. An immediate support on the downside is near the $38,500 zone.

The next major support is seen near the $38,000 level. If there is a downside break below the $38,000 support zone, the price might gain bearish momentum for a move to $36,800.

Technical indicators:

Hourly MACD – The MACD is now losing pace in the bullish zone.

Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is just above the 50 level.

Major Support Levels – $38,500, followed by $38,000.

Major Resistance Levels – $39,500, $40,000 and $40,450.

About Sean Patterson

Check Also

Bitcoin shakes of Fed volatility as analysts remain split on return under $24K

Bitcoin (BTC) circled $30,000 on May 18 after fresh comments from the United States Federal Reserve sparked n volatility. BTC/USD 1-hour candle chart (Bitstamp). Source: TradingViewAnalyst: Extra Fed rate hikes "biggest risk"Data from Cointelegraph Markets Pro and TradingView showed BTC/USD consolidating within a range in place since May 12. The pair had come unstuck as Fed Chair Jerome Powell delivered economic policy insights during the Wall Street Journal's Future of Everything Festival. "I don't know if financial conditions have tightened more than this in a very long time," he told the paper's chief economics correspondent, Nick Timiraos, in an interview. Powell appeared to confirm that 50-basis-point key interest rate hikes would continue in subsequent meetings of the Fed's Federal Open Markets Committee (FOMC) and could reach "neutral" levels in Q4. Hikes afterward, however, could nonetheless continue if necessary to tame inflation further. With traditional ..

Leave a Reply

Your email address will not be published. Required fields are marked *