TA: Why Bitcoin Must Close Above $40K For Trend Reversal

Aayush Jindal

1 year ago

2 mins read

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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.

Aayush Jindal

Aayush Jindal, a luminary in the world of financial markets, whose expertise spans over 15 illustrious years in the realms of Forex and cryptocurrency trading. Renowned for his unparalleled proficiency in providing technical analysis, Aayush is a trusted advisor and senior market expert to investors worldwide, guiding them through the intricate landscapes of modern finance with his keen insights and astute chart analysis.

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