Bitcoin Resumes Downtrend, Why Benefits Remain Limited?


Bitcoin failed to gain pace above $40,700 and fell against the US dollar. BTC traded to a new weekly low and could struggle to climb above $39,200.

Bitcoin started another decline after it failed to clear the key $40,700 resistance zone. The price is now back below $39,000 and the 100 hourly simple moving average. There was a break below a connecting bullish trendline with support near $39,500 on the hourly chart of the BTC/USD pair (Kraken data feed). The pair may correct higher, but the top could cap near USD 38,800 or USD 39,200.

Bitcoin price falls sharply

Bitcoin price tried to make a clear move above the $40,500 level. However, BTC failed to clear the $40,700 and $40,750 resistance levels.

A high was formed near $40,776 and the price reacted to the downtrend. There was a sharp drop below the $40,000 level and the 100 hourly moving average. Additionally, there was a break below a connecting bullish trendline with support near $39,500 on the hourly chart of the BTC/USD pair.

Bitcoin is now back below $39,000 and the 100 hourly simple moving average. It traded as low as $37,672 and is currently consolidating losses.

It is testing the 23.6% Fib retracement level from the recent drop from the $40,776 swing high to $37,672 low. An immediate resistance on the upside is near the USD 38,800 level. The next key resistance could be near the $39,200 zone.

The 50% Fib retracement level from the recent drop from the $40,776 swing high to $37,672 low is also near the $39,250 zone. The main resistance is now forming near the $39,550 level and the 100 hourly simple moving average.

Source: BTCUSD on TradingView.com

If there is a clear move above the $39,200 and $39,550 levels, the price could start a decent rise. In the mentioned case, the price could even surpass the $40,000 resistance. The next major resistance may be near the USD 40,700 zone.

Lose more in BTC?

If bitcoin fails to clear the $39,200 resistance zone, it could continue to fall. An immediate support on the downside is near the USD 37,650 level.

The next major support is seen near the USD 37,500 level. A close below the $37,500 support zone could spark another drop. In the said case, the price may drop to $36,200.

Technical indicators:

Hourly MACD – The MACD is slowly losing pace in the bearish zone.

Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is now well below the 50 level.

Key support levels – $37,650, followed by $37,500.

Major resistance levels – $39,200, $39,550 and $40,000.

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