TA: Bitcoin Corrects From $40K, Why $35K Could Protect Losses

TA: Bitcoin Corrects From $40K, Why $35K Could Protect Losses

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Bitcoin price surged above the $40,000 level before correcting lower against the US Dollar. BTC traded below $38,000, but it is likely to find a strong support near $36,500 or $35,200

  • Bitcoin extended its rally above the $38,000 and $40,000 resistance levels.
  • The price started a downside correction from a new all-time high at $40,400, but it is still well above the 100 hourly simple moving average.
  • There was a break below a key bullish trend line with support near $37,500 on the hourly chart of the BTC/USD pair (data feed from Kraken).
  • The pair is likely to find a strong buying interest near the $36,500 and $35,200 levels.

Bitcoin Price Rallies To $40K

There was a strong upward move in bitcoin price above the $37,000 resistance level. BTC even broke the $38,000 and $38,500 resistance levels. Finally, there was a spike above the $40,000 level.

The price traded to a new all-time high at $40,400 and settled well above the 100 hourly simple moving average. It started a downside correction and traded below the $38,000 level. There was a break below the 23.6% Fib retracement level of the upward move from the $30,000 swing low to $40,365 swing high.

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There was also a break below a key bullish trend line with support near $37,500 on the hourly chart of the BTC/USD pair. The pair is currently consolidating near the $37,000 level.

TA: Bitcoin Corrects From $40K, Why $35K Could Protect Losses

The next major support is near the $36,500 level (a multi-touch zone). On the upside, the broken trend line might act as a short-term resistance near $37,500 and $37,800.  To start a fresh increase, the price must settle above the $38,000 level. The next key resistance is near $38,880, above which the price could revisit the $40,000 level.

Dips Supported in BTC?

If bitcoin fails to clear the $38,000 and $38,880 levels, it could start another downward move. An initial support on the downside is near the $36,600 and $36,500 levels.

The main support seems to be forming near the $35,200 level. It is close to the 50% Fib retracement level of the upward move from the $30,000 swing low to $40,365 swing high.

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Technical indicators:

Hourly MACD – The MACD is gaining momentum in the bearish zone.

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

Major Support Levels – $36,500, followed by $35,200.

Major Resistance Levels – $38,000, $38,880 and $39,800.

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