Bitcoin started a downside correction again and dropped below $42,000. According to technical analysis by NewsBTC’s Aayush Jindal, it needs to stay above $40,000 to prevent a trend reversal.
Bitcoin Support Broke
Bitcoin failed to stay above the $43,000 support zone and continued to decline. There was a move below the 23.6% Fib retracement level of the key increase from the $37,030 low to $45,350 high. There was also a break below a major bullish trend line with support near $42,500 on the hourly chart of the BTC/USD pair. Additionally, it is close to the 50% Fib retracement level of the key increase from the $37,030 low to $45,350 high.
If it stays above the $41,200 support, it could attempt a fresh increase. An initial resistance is near the $42,000 level. The first key resistance is near the $42,500 level and the 100 hourly simple moving average. A clear move above the $42,500 resistance could set the pace for a fresh rise. In the stated case, it could surpass the $43,000 resistance zone. The next major resistance for the bulls is likely near the $44,200 level.
Will Bitcoin Drop More?
Jindal says that if Bitcoin fails to break through the $42,500 resistance zone, it may continue to move lower. An immediate support on the downside is near the $41,200 area. The next major support is seen near the $40,200 level. The main support is still near the $40,000 level. If there is a downside break below the $40,000 support, it could start a major decline.
What Do Technical Indicators Say?
- Hourly MACD – The MACD is now gaining momentum in the bearish zone.
- Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is now close to the 30 level.
- Major Support Levels – 41,200 then $40,000
- Major Resistance Levels – $42,000, 42,500 and 43,000
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