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- Bitcoin price is currently consolidating above the $3,940 support area against the US Dollar.
- The price is likely to grind higher above $4,000 as long as it is above the $3,940 support.
- There is a key bearish trend line is forming with resistance at $3,980 on the hourly chart of the BTC/USD pair (data feed from Kraken).
- The pair could accelerate gains once there is a close above $4,000 and the 100 hourly SMA.
Bitcoin price seems to be preparing for the next break against the US Dollar. BTC is likely to climb above the $4,000 barrier unless buyers fail to defend the $3,960 and $3,940 support levels.
Bitcoin Price Analysis
Recently, bitcoin price rebounded nicely after trading as low as $3,872 against the US Dollar. The BTC/USD pair gained traction and traded above the $3,940 and $3,960 resistance levels. However, the $4,000 level acted as a strong resistance and prevented further gains. A swing high was formed near $3,999 and later the price corrected lower. There was a dip below the $3,980 level and the 23.6% Fib retracement level of the last wave from the $3,872 low to $3,999 high.
However, the key $3,940 support area acted as a strong barrier for sellers. The price found support just above $3,940 and the 50% Fib retracement level of the last wave from the $3,872 low to $3,999 high. It is currently moving higher and trading near the $3,980 resistance. There is also a key bearish trend line formed with resistance at $3,980 on the hourly chart of the BTC/USD pair. Above the trend line, the 100 hourly SMA is positioned near the $3,985 level.
Therefore, a break above the trend line, the 100 hourly SMA, and $4,000 is must for buyers to gain control. Above $4,000, the next key resistance is near the $4,020 level, above which the price is likely to test the $4,045 resistance. On the downside, an initial support is at $3,960. However, the main support is near $3,940, which may continue to hold losses.
Looking at the chart, bitcoin price is clearly consolidating above the $3,940 support level. As long as the price is above $3,940, there are chances of more gains above $3,980 and $4,000. To gain bullish momentum, a clear break above the $4,020 pivot level is required. On the downside, a close below the $3,940 support might accelerate losses towards the $3,900 and $3,875 levels.
Technical indicators:
Hourly MACD – The MACD is currently in slowly moving in the bullish zone.
Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is currently above the 50 level, with positive signs.
Major Support Levels – $3,960 followed by $3,940.
Major Resistance Levels – $3,980, $4,000 and $4,020.
