TA: Bitcoin Breaks Key Support, Why BTC Could Dive Below $40K
Bitcoin started a fresh decline from well above the $ 44,000 level against the US Dollar. BTC broke the $ 42,500 support and remains at a risk of more downsides.
- Bitcoin traded below an important support zone at $ 42,500.
- The price is trading below $ 42,500 and the 100 hourly simple moving average.
- There is a key bearish trend line forming with resistance near $ 42,200 on the hourly chart of the BTC/USD pair (data feed from Kraken).
- The pair could decline further if it fails to recover above the $ 42,800 zone.
Bitcoin Price Extends Decline
Bitcoin price failed to clear the $ 45,500 resistance and started a major decline. BTC traded below the $ 43,200 and USD 42,500 support levels to move into a short-term bearish zone.
There was also a close below the $ 42,50 level and the 100 hourly simple moving average. A low was formed near $ 41,573 and the price is now consolidating losses. An immediate resistance is near the $ 42,000 level. The first major resistance is near the $ 42,200 level.
Besides, there is also a key bearish trend line forming with resistance near $ 42,200 on the hourly chart of the BTC/USD pair. The next key resistance could be $ 42,500 or the 23.6% Fib retracement level of the recent decline from the $ 45,900 high to $ 41,573 low.
Source: BTCUSD on TradingView.com
The main resistance seems to be forming near the $ 42,850 level or the 100 hourly simple moving average. A clear move above the 100 hourly simple moving average might send the price to $ 43,750. It is near the 50% Fib retracement level of the recent decline from the $ 45,900 high to $ 41,573 low.
More Losses in BTC?
If bitcoin fails to start a fresh increase above $ 42,850, it could continue to move down. An immediate support on the downside is near the $ 41,600 zone.
The next major support is seen near the $ 41,200 level. If there is a downside break below the $ 41,200 support, the price could start a major decline towards the $ 40,000 level.
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 – $ 41,600, followed by $ 41,200.
Major Resistance Levels – $ 42,200, $ 42,850 and $ 43,000.