Key Bitcoin Indicator Suggests More Downside

Bitcoin continues to fall below $42,000 against the US dollar. If BTC remains below the $43,000 pivot area, it still faces more downside risks.

  • Bitcoin extended its decline and fell below the key $42,000 support area.
  • Prices traded below $43,000 and the 100 hourly simple moving average.
  • There is a key ascending channel forming with support near $41,650 on the hourly chart of the BTC/USD pair (data feed from Kraken).
  • Without a recovery wave above $43,000, the pair could continue to decline.

Bitcoin price continues to fall

Bitcoin price starts dramatically drop Below the $45,000 and $43,500 support levels. BTC even dipped below the $42,000 support area to move further into bearish territory.

Prices settled below $43,000 and the 100 hourly simple moving average. The bears are trying to push the price towards $40,000. A low was formed near $40,555 before a recovery wave emerged. The price recovered above $42,000, 100 hourly simple moving average.

However, bears remain active near $42,800. A high was formed near $42,786 and the price is now falling. The move from the $40,555 swing low to $42,786 high fell below the 23.6% Fib retracement level of the recent wave.

It is now trading near the $41,750 support. The 50% Fib retracement level of the latest swing from the $40,555 swing low to $42,786 high is also near $41,650.

Furthermore, there is a key ascending channel forming with support near $41,650 on the hourly chart of the BTC/USD pair. On the upside, the first major resistance is near $42,250 and the 100 hourly SMA. The next major resistance is near $43,000.

Source: BTCUSD on TradingView.com

A clear break above the $43,000 resistance zone could start a nice recovery wave. The next major resistance is near $44,500.

More disadvantages of BTC?

If Bitcoin fails to recover above $43,000, it may continue to decline. Immediate support is near $41,800. The first major support is near $41,650 and the channel trendline.

A break below trendline support could trigger a move below $41,000. In the above-mentioned scenario, the price could drop towards the $40,000 level in the near term.

Technical indicators:

Hourly MACD – The MACD is now picking up pace in the bearish zone.

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

Major support levels – $41,650, then $40,000.

Major resistance levels – $42,750, $43,000 and $44,500.

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