Bitcoin continues to flutter in and out of the $40,000 price point. If we keep these breaks above $40K, there are now a total of five since the start of the year. It’s one thing to break above a key resistance level, but it’s another to stay above it and form a strong support. The latter has proved elusive for the digital asset, raising the question of whether the cryptocurrency can really stay above this time.
Bitcoin ends inactive streak
Bitcoin has had an inactive streak since it last failed to rise above $40K. After breaking through the coveted resistance point, it again failed to prove it could form support. It had then fallen to the $38K level. This point has always been a strong support at this level, so as expected it was the stop point for the decline.
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Over the past week, the cryptocurrency consolidation range had tightened with digital asset trading around the $39,000 level. It still stayed at low momentum the entire time, indicating that even if there was a recovery trend, it wouldn’t be significant in any way.
BTC Recovers Above $40K Again | Source: BTCUSD on TradingView.com
However, Bitcoin has continued to drag the market along. The correlation with coins like Ethereum has remained on the high side. Uncertainty about where the digital asset is coming from has translated into trading volume. But with the opening of the midweek trading market, the cryptocurrency has picked up some momentum.
Fifth time is the charm?
Again, bitcoin has broken above $40,000. This point, which is still a difficult level to conquer, remains the most obvious obstacle for the digital asset. The $40,000 to $44,000 is the obvious culprit. Bears tend to build their resistance at these crossroads as a breach to $46,000 would put bitcoin on another bull trend.
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While the market awaits the Fed’s decision, bitcoin has been on the rise in anticipation of what the outcome might be. On the other hand, bitcoin’s correlation with gold has declined over the past week. It has now reached an eight-year low.
The price of BTC is still shaky at $40,000 at the time of writing. If history is to be followed at this point, the market could see the digital asset dip back below $40,000 by the start of the weekend.
Featured image from Forbes, chart from TradingView.com