Bitcoin Turns Red, Why BTC Could Dive Below $39K


Bitcoin started another drop below the $40,000 level against the US dollar. BTC could amplify losses if it stays below the $40,000 resistance zone.

Bitcoin started falling again after failing to clear the $40,000 resistance zone. The price is now trading below $39,500 and the 100 hourly simple moving average. A major bearish trendline is forming with resistance near $39,500 on the hourly chart of the BTC/USD pair (Kraken data feed). The pair could start a big decline if it closes below the $38,800 level.

Bitcoin Price Gaining Bearish Momentum

Bitcoin price fell below the USD 40,500 level to enter a bearish zone. BTC traded below the $40,000 support level and settled below the 100 hourly simple moving average to enter a bearish zone.

The price even traded below the USD 39,200 support level. A low is being formed near $38,700 and the price is now consolidating losses. An immediate resistance on the upside is near the USD 39,500 level. A major bearish trendline is also forming with resistance near $39,500 on the hourly chart of the BTC/USD pair.

The next key resistance could be $39,700 or the 23.6% Fib retracement level from the recent drop from the $42,950 swing high to $38,700 low.

The first major resistance is now forming near the $40,000 level. The main resistance is near $40,500 and the 100 hourly simple moving average. To start a strong upward move, the price needs to break above the $40,500 zone and the 100 hourly simple moving average.

Source: BTCUSD on TradingView.com

In the case mentioned, the price could even surpass the 50% Fib retracement level from the recent drop from the $42,950 swing high to $38,700 low.

Lose more in BTC?

If bitcoin fails to clear the $40,000 resistance zone, it could continue to fall. An immediate support on the downside is near the USD 39,000 level.

The next major support is seen near the USD 38,800 level. A downward breach below the $38,800 zone could send the price towards the $37,500 support zone.

Technical indicators:

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

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

Key support levels – $39,000 followed by $38,800.

Major resistance levels – $39,500, $39,800 and $40,000.

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