Why Bitcoin Must Close Above $40K For Trend Reversal?

Bitcoin is struggling to clear the $40,000 resistance zone against the US dollar. BTC needs to settle above $40,000 to start a steady upward move.

Bitcoin struggled to clear the $40,000 resistance zone and corrected lower. The price is trading below $39,000 and the 100 hourly simple moving average. There was a break below a short-term contract triangle with support near $38,800 on the hourly chart of the BTC/USD pair (Kraken data feed). The pair could start a big gain if it closes above the $40,000 resistance zone.

Bitcoin Price Faces Major Resistance

Bitcoin price remained in positive zone above the $38.00 pivot level. BTC even broke the USD 39,500 resistance level. The bulls made a few attempts to clear the $40,000 resistance zone, but they failed.

The recent swing high formed near $39,888 before there was a downward correction. There was a move below the $39,000 and $38,800 support levels. In addition, there was a break below a short-term contract triangle with support near $38,800 on the hourly chart of the BTC/USD pair.

The pair is now trading below the $39,000 and the 100 hourly simple moving average. A low is formed near $37,028 and the price is consolidating losses.

On the upside, an immediate resistance is near the $38,200 level and the 100-hour SMA. The next key resistance is near the USD 38,500 level. It is near the 50% Fib retracement level of the downward move from the $39,888 swing high to $37,028 low.

Source: BTCUSD on TradingView.com

The main resistance is now near the USD 38,800 level. It is close to the 61.8% Fib retracement level of the downward move from the $39,888 swing high to $37,028 low. A clear move above the $38,800 resistance could send the price higher. In the said case, it could even attempt a clear move above $40,000.

Dips limited in BTC?

If bitcoin fails to clear the $38,800 resistance zone, it could trigger a downside correction. An immediate support on the downside is near the $37,200 zone.

The next major support is seen near the USD 36,400 level. If there is a downside breach below the $36,400 support, the price could gain bearish momentum towards $35,000.

Technical indicators:

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

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

Key support levels – $37,200, followed by $36,400.

Major resistance levels – $38,200, $38,800 and $40,000.

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