Bitcoin Begins Recovery, Why $38K Is Key For Reversal?
Bitcoin extended its decline below $34,000 against the US dollar. BTC is recovering but needs to clear $38,000 for steady upward movement.
Bitcoin remained in a bearish zone below the $38,000 and $36,500 support levels. The price is now trading near $36,500 and the 100 hourly simple moving average. There was a break above a major bearish trendline with resistance near $35,450 on the hourly chart of the BTC/USD pair (Kraken data feed). The pair could start a big gain if there is significant movement above the USD 38,000 resistance.
Bitcoin price eyes recovery
Bitcoin’s price decline extended below the $35,000 and $34,000 support levels. BTC even spiked below the $33,000 level. It hit a low near $32,940 and the price recently started a recovery.
There was a breach above the $35,000 and $35,500 resistance levels. The bulls pushed the price above the 23.6% Fib retracement level from the recent drop from the $43,490 swing high to $32,940 low. In addition, there was a break above a major bearish trendline with resistance near $35,450 on the hourly chart of the BTC/USD pair.
The pair even peaked above the $37,000 level. Bitcoin is now trading near $36,500 and the 100 simple hourly moving average. On the upside, an initial resistance is near the $37,000 level.
Source: BTCUSD on TradingView.com
The first major resistance is near the $38,000 zone. It is near the 50% Fib retracement level from the recent drop from the $43,490 swing high to $32,940 low. An upward breach above the $38,000 resistance could start a steady wave of recovery towards $40,000. The next key resistance is near the $41,200 level, above which the bulls could target a test of $42,000.
New decline in BTC?
If bitcoin fails to start a fresh rise above $38,000, it could trigger another drop. An immediate support on the downside is near the $36,000 zone.
The first major support is seen near the $35,400 zone. A downward breach below the $35,400 support zone may see another drop. The next major support is near $34,000, below which the price could hit the recent low again.
Hourly MACD – The MACD is now losing pace in the bullish zone.
Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is now above the 50 level.
Key support levels – $35,400 followed by $34,000.
Major resistance levels – $37,000, $38,000 and $38,200.