After Bitcoin tested the $38,200 region, it started a major recovery wave with Elon Musk’s acquisition of Twitter and broke above the $40,000 resistance. According to technical analysis by Aayush Jindal of NewsBTC:
Bitcoin Rebounds Hard
Bitcoin extended its decline below the $38,500 level. However, the bulls were active near the $38,200 level. A bottom was formed near $38,200 and BTC started a massive increase. The price climbed above the $39,200 and $39,500 resistance levels. There was a move above the 23.6% Fib retracement level of the drop from the $42,950 high to $38,200 low.
There was also a break above a major bearish trend line with resistance near $39,550 on the hourly chart of the BTC/USD pair. Bitcoin climbed back above $40,000 and the 100 hourly simple moving average.
An immediate resistance is near the $40,550 level. This is close to the 50% Fib retracement level of the key drop from the $42,950 high to $38,200 high. The next key resistance could be $40,950. If there is a clear move above the $40,950 and $41,000 levels, the price could continue to rise. In the stated case, the price might even surpass the $41,200 resistance. The next major resistance could be near the $41,800 area.
Are Drops Limited?
Jindal says that if Bitcoin fails to break past the $41,000 resistance zone, it could start a downside correction. An immediate support is near the $40,000 level. The next major support is near the $39,800 level and the 100 hourly simple moving average. A close below the $39,800 support zone could start another decline. In the stated case, the price could drop to $39,000.
What Do Technical Indicators Say?
- Hourly MACD – The MACD is slowly gaining momentum in the bullish zone.
- Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is currently well above the 50 level.
- Major Support Levels – $40,000 then $39,800
- Major Resistance Levels – $40,550, 40,950 and 41,800
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